telcodad ESPN’s new streamer won’t cannibalize the pay-TV bundle – analysts
Cannibalizing their pay-TV bundle is the least of their worries. Disney is a horizontal conglomerate, owning ABC network and various Disney channels and ESPN. This gives them tremendous leverage, as they have cablecos over a barrel. You WILL put ESPN and ESPNU on the basic tier, or else you won’t get access to ABC and the various Disney channels. Running a cableco without ABC and the various Disney channels is not possible, so the cablecos caved, and EVERY pay-TV subscriber, even the ones who hated sports, was an ESPN subscriber. What could possibly go wrong?
Problem… the value of “every” has shrunk drastically. Looking at the graph at https://www.ibisworld.com/us/bed/number-of-cable-tv-subscriptions/4625/ we see that the number of cable (or is this total Pay-TV?) subscribers has fallen from a peak value of of 105 million in 2010 to 66.1 million now. That’s a loss of almost 39 million subs, 37% of their base, in 15 years. OUCH! The trend has accelerated in recent years.
I’m not a marketing MBA, but I can extrapolate a straight line. I extracted the data from that graph, and ran a regression from 2021 onwards (see below). By the mid-2040’s cable TV will be gone. Possibly even mid-2030’s, because there won’t be the necessary economies of scale to maintain profitability. Some smaller cablecos have given up on cable TV already, and operate strictly as ISPs.
The people at Disney see the end of their cable revenue stream, and they’re pivoting to streaming. Will it work? I don’t know, but it’s their only chance.