With skinny bundles, Disney hopes to fatten profits
With skinny bundles, Disney hopes to fatten profits
Disney has high hopes for a new model of paid TV that looks a whole lot like the old model of paid TV — just skinnier. CEO Bob Iger said in the company’s quarterly earnings call Wednesday that a new suite of “skinny bundle” services could help bring ESPN to bigger audiences as subscribers to the standalone streaming app have dipped in recent months, and paid TV subscribers continue to cut the cord.
Disney backed out of a much-anticipated sports streaming venture called Venu that would have brought together sports content from ESPN, Fox and Warner Brothers Discovery largely because it got tied up in a legal challenge. But Iger also said these new skinny bundles made the project “redundant.”
This idea has been around since ye olde days of cable TV: A smaller cable package that’s cheaper.
But in the past, Ross Benes, senior analyst at eMarketer, said high value content like sports was pretty much never on the menu.
“You couldn’t just, like, get ESPN and nothing else from Disney if you were a paid TV operator, but there’s more flexibility on that now,” he said.
Last month, Comcast and DirecTV announced new services that bring together most of the top sports and news channels and nothing else. At $70 a month, they’re not exactly lightweight. But they’re at least ten bucks cheaper than comprehensive live TV services from YouTube or Hulu.
That puts them in a sweet spot, said Elizabeth Parks at market researcher Parks Associates.
“We’re tracking consumers spending about $71 a month now, and that’s actually a drop from a peak of $91 we saw a few quarters ago,” she said.
The skinny bundle model could be repeated across different genres, said Vincent Piturro, a professor of media studies at Metropolitan State University Denver.
“Are we going to have a skinny bundle of sci fi, a skinny bundle of documentaries?” he said. “I think what these companies have to find is the point where people will pay for what they want, but also convenience too.”
While going a la carte might have seemed like an answer to the bloated buffet of cable TV packages, the smorgasbord of streamers also became overwhelming.
“It was too specific, too expensive, and it was too confusing,” he said.
However sports fans hoping to survive on a skinny bundle diet may be disappointed. Pro leagues like the NFL are increasingly selling game rights directly to streamers like Netflix or Amazon that aren’t in any bundles.
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