USA

Disney’s ESPN+ is Growing Rapidly Despite Losing Money

Walt Disney Co. is attracting users to its ESPN+ sports streaming service, but it’s coming at a high cost. ESPN+ is a video streaming subscription service that is available in the US. The channel is telecasted by sports broadcaster Walt Disney Direct-to-Consumer and International and ESPN Inc. The Walt Disney Direct-to-Consumer and International is a subsidiary of The Walt Disney Company.

The company said quarterly earnings for its first fiscal quarter ended December 29, 2018, and the ESPN+, which had been launched last year, has 2 million paying subscribers. This count is double the number from five months ago. Customers get a selection of live hockey, baseball, and soccer games as well as UFC fights and other original content like “30 for 30” documentaries for just $5 a month.

The Ultimate Fighting Championship announced a new five-year linear and digital television rights deals with ESPN. This deal has taken effect from January 2019. ESPN+ will also hold all rights to supplemental content like archive content, PPV encores, Dana White’s Contender Series, and offer sales of UFC Fight Pass within the platform. The first ESPN+ event of Ultimate Fighting Championship was the UFC Fight Night: Dillashaw vs. Cejudo. It is reported that ESPN+ has generated around 525,000 new subscribers on the day of the event alone.

“We expect the expansion of combat sports content on the streaming service to drive continued growth in the months ahead,” Bob Iger CEO of Disney said on the earnings call with analysts.

However, the streaming services remains a money-losing business for Walt Disney, and they are thinking of new ideas to take on media-services like Netflix. The company said that its international and direct-to-consumer segment lost $136 million in the quarter on revenue of $918 million.

Hulu is an American entertainment company that provides “over-the-top media services.” Disney owns a stake in Hulu and is a big part of that business. Bob Iger said “the goal is obviously to operate Hulu profitably,” but the company is not saying how long it will take. It is to be noted that later during this year Disney is rolling out its Disney+ service, providing subscribers with movies, new shows, and animated content.

Overall, Disney reported revenue of $15.3 billion and earnings of $1.84 a share. Investors want to be proved that as more audiences move to mobile and over the top media services, Disney can eventually make money from Disney+, Hulu, and ESPN+. Iger over a call said that “Ultimately our goal would be to use the same tech platform to make it easier for people to sign up to all three should they want to use the same credit card, same username, same password, etc.” In buying all three, the company “would give them an opportunity potentially at a discount or two for that matter,” he said.

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