Disney seems to have the goods and a plan to put a hurting on its competition and its not even hiding that well. Disney has its own bundle already. It quickly consolidated power with Hulu by buying out FOX, Time Warner and Comcast. It launched Disney+ and has seen it shoot right into the highest echelon of streaming services and has quietly been growing ESPN+ offerings with the presence of AMA, the popularity of its documentaries and international offerings even in the presence of the COVID-19 pandemic that has shut down most sports.
Take a look at the TV marketplace and think about Disney’s power compared to everybody else. Disney has the most extensive and exclusive library of family programming in the industry including rights to everything Star Wars, Marvel, Disney, Pixar and even National Geographic docs. It owns huge movie studios like 20th Century (Formally 20th Century Fox), Searchlight, Disney, Marvel, Lucas Film, ILM and enough other studio subsidiaries to fill a page. It has its own Live cable streaming service in Hulu with live TV. It owns ESPN and everything associated with it. It even owns ABC, one of the big broadcast networks. Think about it.
Disney can put a hurting on TV industry without playing hardball. Here is how it could do so. Add the ESPN family to a new bundle. Disney already offers ESPN+, Hulu and Disney+ as a $12.99 package. What if Disney said hey want more sports? For $13.00 you can add the entire ESPN family of networks and watch them live through the ESPN App. Now you have live sports, a huge library of on-demand content with originals from all these major studios and 24-7 premium sports. The ESPN App where you access ESPN+ and ESPN3 content is already home to live feeds of the linear ESPN channels. It’s as though the idea is already baked in. And this is just what Disney could do without pushing the envelope.
Imagine the amount of people who would consider that kind of package over a standard traditional bundle. Now of course some of the core sports audience would say they still need Fox Sports and so on and would rather pay 60 or more for that and entertainment and news channels on top of that. No skin off Disney’s back there. They still make money from selling all of their services to distributors around the world including their competitors in the streaming space.Every service that offers the multiple ESPN’s and the multiple Disney Channel offerings, and Free Form, and licensing the rights to their films to networks pays Disney.
But the thing is, there is not another property that can approach that. What could Comcast offer to match something like combing ESPN with Hulu? The NBC Sports Network? It’s not even a comparison. Even FOX, which recently purchased Tubi TV can’t compete for pure sports eyeballs with the offerings from FS1 or FS2. Disney could cost traditional cable companies and streaming competitors a lot of customers just by offering to sell access it already owns.
It could also leverage its live Hulu delivery as well. Say a discount of $5.00. $75.00 for, Hulu with live TV, Hulu’s entire library of movies and TV shows, Disney’s entire library of movies and TV shows. With people already in with services like Netflix and Amazon and free offering like Pluto TV and others there could be no time for other services.
Now let’s fast forward a bit to a day where ATSC 3.0 and 5G are a thing. If Disney were to reverse engineer what AT&T did think of the implications. If Disney acquired interest in a cell network and built out 5G it would have a way to deliver its own service without needing to negotiate with ISPs. At the moment Disney does not have that power. It may even be prevented from attaining it. But did you expect AT&T to end up owning Time Warner, Warner Brothers, DC Comics, Turner Networks and that whole company that it packaged into HBO Max? I would keep an eye on that.
If Disney were to buy a company like Verizon or sprint or US Cellular it could essentially build out a 5G delivery system and wait for all of its distribution deals with every TV provider outside of major partners like Comcast and its collection of major networks tell consumers, you can’t get our stuff without Hulu’s live service. AT& has done it with Sling TV and Dish already regarding HBO in favor of DirecTV, AT&T TV Now and AT&T TV (yes they are totally different services).
Whether Disney even considers something like that will be up to regulators and other factors. But there is also ATSC 3.0. It will soon be possible to deliver internet based content via broadcast signals. Take a look at Evoca and tell me Disney would not consider something like that. A skinny Disney owned bundle directly to your TV without having to worry about broadband internet.
Things change slowly in the entertainment world until they don’t. And the coming of 5G and ATSC 3.0 could be like a meteorite to the earth of the cable internet industry. But Disney is already built to ride the shockwave it will create.
