ESPN's Streaming Service Gets A 42% Price Hike
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ESPN's Streaming Service Gets A 42% Price Hike
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Hey Friends,
Disney announced this week that they are raising the price of ESPN+ from $6.99 per month to $9.99 per month; and by year, the service will be going from an annual price of $69.99 to $99.99 — that’s a 43% increase and the 3rd price hike for ESPN+ in 3 years.
ESPN+ Monthly Price History
2018: $4.99
2020: $5.99
2021: $6.99
2022: $9.99
One important note is that ESPN+’s price won’t increase as part of the Disney streaming bundle. For example, the bundle that includes Disney+, ESPN+, and ad-supported Hulu will remain at $13.99 per month and $19.99 per month for the same package for Hulu without ads.
ESPN+ Subscribers (2019-2022)
So why are they doing this? Well, excluding the COVID-19 stock market shock in 2020, Disney’s stock price currently sits at its lowest level ($99/share) in nearly a decade. And that’s without even considering 40-year high inflation in the US.
Add in the fact that the company reported a $887 million operating loss on its streaming services for the second quarter of its 2022 fiscal year—up from $290 million a year ago—and the 42% price hike for ESPN+ starts to make a lot more sense.
Some of this is driven by profitability, of course. Disney has more than 22 million subscribers on ESPN+, and investors are starting to wonder if the service will ever be profitable — and increasing prices 40 percent-plus is the quickest way to show that.
Fun Fact: ESPN+ ($9.99/month) is officially now more expensive than the cable subscription cost of ESPN ($8.15/month) — ESPN+ has 22.3M subs, and ESPN has 75.7M subs.
But I also think this speaks to the immense value that Disney has continued to add to the ESPN+ service over the last several years. They know that live sports are the most valuable asset in sports media—94 out of the top 100 most-watched programs on linear television were live sports in 2021—and they have spent billions of dollars on exclusive content to drive subscribers, increase retention, and maintain favorable LTV.
For example, ESPN+ now offers more than 22,000 live events, and virtually all of ESPN’s recent media rights deals include a carve-out component for ESPN+.
Here are a few examples:
NFL: The network renewed its NFL broadcast rights for $2.7 billion per year, which includes Monday Night Football and exclusive regular season games
ESPN+ Impact
As part of the new deal, any game that airs on ESPN or ABC can be simulcast on ESPN+
ESPN+ also gets an exclusive International Series game (which will be the London game between the Broncos and Jaguars on October 30)
MLB: ESPN is paying $3.85 billion over 7 years to broadcast Sunday Night Baseball, 5 other exclusive games, and Wild Card games
ESPN+ Impact
ESPN can simulcast all of its MLB games on ESPN+
NHL: ESPN is paying $400 million per season as part of a 7-year, $2.8 billion deal to broadcast NHL games
ESPN+ Impact
ESPN+ absorbed NHL.TV to become the NHL’s streaming provider for out-of-market games
ESPN+ and Hulu split 75 exclusive live NHL games each season
Wimbledon: ESPN signed a 12-year extension with Wimbledon through 2035 for an undisclosed amount (they were paying $42 million per year under their previous agreement)
ESPN+ Impact
The new deal includes broadcast coverage of ALL Wimbledon courts starting in 2024, as well as access to all qualifying rounds and ancillary content from the AELTC (films, classic matches, highlights shows, press conferences, etc.)
Australian Open (tennis): Signed a 9-year deal with Tennis Australia for an undisclosed amount to broadcast the Australian Open
ESPN+ Impact
ESPN’s “first ball-to-last ball” coverage is now a part of ESPN+
PGA Tour: ESPN is paying $75 million a year as part of a 9-year deal worth $675 million, which made ESPN+ the exclusive streaming partner of the PGA Tour
ESPN+ Impact
The platform became the exclusive streaming provider of the PGA Tour
Exclusive rights to PGA Tour Live, the tour’s subscription video service that includes on-demand recaps and original content
Live coverage of 36 tournaments (4,300 exclusive hours)
Four live content channels during the FedEx Cup season
UFC: ESPN is paying $150 million per year on a 5-year deal worth $750 million it signed in 2019 to broadcast all UFC events
ESPN+ Impact
This deal made ESPN+ the exclusive pay-per-view home of UFC and includes exclusive UFC Fight Night events
ESPN raised the prices for UFC PPV events from $69.99 to $74.99 in January 2022, which was the third time it increased the price
Formula 1: ESPN is paying $75 to $90 million per year to broadcast F1 on its platforms through 2025
ESPN+ Impact
The new deal will see a small number of races air exclusively on ESPN+
La Liga: ESPN signed a deal with Spain’s La Liga worth $1.4 billion over 8 years at $175 million per year
ESPN+ Impact
Live and on-demand coverage of 380 top-flight La Liga games on ESPN+
A selection of games from La Liga SmartBank, the second tier of Spanish football
Bundesliga: ESPN signed a deal worth $180 million over 6 years with the German Bundesliga
ESPN+ Impact
ESPN+ is the exclusive home of Bundesliga games in the US
PLL: ESPN signed a 4-year deal with Premier Lacrosse League worth 8 figures
ESPN+ Impact
47 games will be streamed on ESPN+ each season
And while those content deals have been invaluable in building up an ESPN+ subscriber base of more than 22 million today, it doesn’t even include original content like Man in the Arena, Peyton’s Places, Eli’s Places, Stephen A’s World, More Than An Athlete, The Fantasy Show, Why Not Us, America’s Caddie, Detail, and more.
So whether people want to say Disney is chasing profitability, increasing revenue to pay for higher rights fees, or simply just trying to highlight the value of their bundle deal, I think it’s become clear that the platform is extremely valuable to sports fans.
Instead, the interesting part to me will be watching how Disney tightropes the eventual cannibalization of its cable business in favor of its streaming business.
Have a great day. I’ll talk to everyone tomorrow.
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ESPN's Streaming Service Gets A 42% Price Hike
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