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Above all, Disney+ is an attempt to reclaim the massive royalties Disney was reaping from every cable subscription that carried ESPN. Almost a quarter of The Wa
by cookiecaper 7y ago
Above all, Disney+ is an attempt to reclaim the massive royalties Disney was reaping from every cable subscription that carried ESPN. Almost a quarter of The Walt Disney Company's revenue originated from ESPN in 2015-ish (which was the last time I looked), making it neck-and-neck with Parks and Resorts for Disney's most valuable business unit. Cord-cutting was a serious risk to them then and I'm sure they've only felt the sting more over the last five years.
- stefan_ 7y agoDing ding ding, I think this is the only way how this kind of calculation makes any sense at all: they are expecting Disney+ to replace all the cable revenue they lost, and until then, it's not "break even". Because it sure as hell is not the opportunity costs of having their content on their own streaming service. Like Toy Story 4 released months ago, did a billion in cinema, but they still won't have it on Disney+ until.. somewhere in 2020. Their version of "betting the company" is "all the stuff you used to have on Netflix, but now you are paying extra".
- papln 7y agoIf ESPN is what people want to pay for, why can't they just jack up the price of ESPN instead of making Disney+?
- matwood 7y agoESPN is not what people want to pay for. Nearly every cable subscription included ESPN, and core cutting has greatly cut ESPN revenue.
- cookiecaper 7y agoDisney was (and presumably still is) collecting tens of dollars per month for every cable subscription that has access to ESPN (the number I remember reading was something like $23 but that may be incorrect). Since ESPN is included in most cable subscriptions, virtually every cable subscription cancelled is an immediate revenue loss for TWDC.