Disney may sell ESPN as a standalone service
ESPN, the top sports network on cable, could be sold as standalone to its subscribers in the future, but not so soon. Analysts say that it would be too expensive to watch ESPN shows if it would be sold on standalone.
Disney CEO Bob Iger said in an interview on CNBC, "I think eventually ESPN becomes a business that is sold directly to the consumer."
Disney is currently researching for the cost of a standalone network, but recent findings show it is not viable as of now. Michael Nathanson of MoffettNathanson Research estimated that ESPN would cost $36.30 a month for a separate bundle, noted Market Realist. In that case, it would be too pricey compared to other competitor channels.
ESPN lost 3.2 million viewers since the number of pay-TV subscribers increased, 9to5 Mac reported.
"Technology is the most disruptive force that so-called traditional media ... is facing," Iger said.
Despite that, he said that the company must adjust to the advances in technology. "While the business model may face challenges over the next few years, long term for ESPN ... they'll be fine. They have pricing leverage, too," the CEO added.
He emphasized that if changes in media reduces multi-channel bundle, quality and popularity will bring them back in the game.
"I have very bullish feelings about ESPN long-term, but I'm a realist in terms of the disruptions of the business. I happen to believe that if we end up seeing more erosion in terms of the so-called multi-channel bundle, quality will win out and popularity will win out," he pointed out.
Iger is optimistic that in the media industry, it is vital to have a secured and tough brand. ESPN has tied up with major sports leagues that brought such high ratings such as the Major League Baseball, College Football Playoff and National Football League, that's why he thinks a stand-alone will appeal to many.
In a recent report from Fierce Cable, Barry Diller, a media executive, testified in the Congress that even if the influence of Internet video carries on, it will not replace the traditional media distribution channels.
"What we see is a record number of televisions in the home, which may seem counterintuitive. But people love large screen TVs and a high-definition experience".
Media networks are puzzled by the huge changes going on in broadcast media. But by this time, it is still unpredictable if it would change the home viewers' perspective.