ESPN streaming service to debut in fall of 2025

Disney CEO Bob Iger has long held that making the flagship ESPN network available under a direct-to-consumer (DTC) streaming model is inevitable. Now, we (sorta) know when it will be unleashed into the marketplace.

The full suite of ESPN channels will become available as a standalone streaming product in the fall of 2025 – and likely in August of that year – Disney Chairman and CEO Bob Iger revealed Wednesday on the company's fiscal Q1 2024 earnings call.

ESPN DTC will be a "highly interactive" service that will feature live games and studio programming from the ESPN channels along with integration of the ESPN Bet sportsbook, fantasy sports, game stats and online merchandising, Iger said.

He said that Disney plans to develop ESPN DTC with other content and marketing partners, and those talks are making progress.

The new ESPN streaming option is being developed amid ESPN's participation in a new sports streaming bundle that will also feature channels from Fox and Warner Bros. Discovery (WBD) that's set to launch this fall and include coverage of all the top sports leagues.

Disney is spreading its bets on ESPN amid a growing cord-cutting trend taking a heavy financial toll on the traditional pay-TV business ecosystem.  

Disney believes the ESPN DTC product and the new sports bundle will appeal to consumers who have cut the pay-TV cord or have, thus far, not subscribed to a traditional pay-TV bundle.

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"Ultimately, our mission is to make ESPN into the preeminent digital sports brand, reaching as many sports fans as possible and giving them even more ways to access the programming they love and in whatever way best suits their needs," Iger said.

Sports streaming bundle to cost 'substantially' less than regular pay-TV

The new sports-centric joint venture, which will carry a new brand and be run by a separate management team, will effectively operate as a virtual multichannel programming distributor (vMVPD), a category that includes YouTube TV, Sling TV and FuboTV, among others.

Under that model, ESPN, Fox and WBD will get paid for their respective channels in the sports streaming bundle in much the same way that other types of distributors pay for them.

"For us, it's very low risk and … potentially quite accretive to us in terms of signing up sports fans that have never signed up for the bundle or that may no longer want it," Iger said.

ESPN, Fox and WBD haven't announced pricing for the new bundle. Iger said it would be "substantially less expensive" for consumers to get those channels via the streaming bundle compared to what they'd pay to get them from cable and satellite TV distributors.

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The analysts at LightShed Partners estimated in a blog post (registration required) that the new offering will carry an initial price of $35 per month, "escalating to $40 in year two," with Disney receiving about $20 per sub in carriage fees, compared to $8 for Fox and $4 for WBD (Turner).

Former Sports Networks president Bob Thompson told USA Today that he expects the new offering to sell for more than $40 monthly.

By comparison, YouTube TV, a vMVPD that now has more than 8 million subscribers and is considered the nation's fourth-largest MVPD, costs around $75 per month.

Questions about Hulu

Disney also faced questions about the long-term prospects for Hulu + Live TV, a service that has stalled out at about 4.6 million subscribers.

"Hulu Live more reflects the bigger, fatter bundle of television channels," Iger said, noting that the live TV offering is attached to the Hulu subscription VOD service, which added 1.2 million subs in the quarter for a total of 45.1 million.

While an argument could be made that the new ESPN/Fox/WBD sports streaming bundle will compete directly with Hulu Live, Iger also points out that Hulu SVoD customers will have the option to bundle in the new streaming sports service.

"As we see it, that's a real positive," he said. "Hulu Live is certainly a nice, important feature of our Hulu business, but the critical part of that business is Hulu itself," he said.