Disney Prices ESPN OTT Service At $4.99 A Month Ahead Of Spring Launch

At the top of Disney’s quarterly earnings call, CEO Bob Iger said the long-awaited stand-alone ESPN OTT service will be priced at $4.99 a month.

It will be available at launch this spring via Apple iOS, Android and ChromeCast as the initial platforms, with “more to follow,” Iger said. He said BAMTech, the OTT specialist that Disney acquired last year, enabled the company to scale the app quickly.

He stressed that the app “will be a completely new app,” with three main features: personalized scores, highlights and news; live streaming of the existing linear networks, and the new “ESPN Plus” component. ESPN Plus will include “incremental thousands of hours of live programming,” Iger said, plus the full library of entries in the 30 for 30 franchise.

The company will invest in original content that will be made exclusively for the app, as it is doing for the general entertainment Disney OTT service launching in 2019.

The “technological guts” of the existing ESPN app, “are being completely re-done,” Iger said. The new one will offer sports fans “a greatly expanded array” of content, including “countless scores and highlights,” plus podcasts and several live streams. MVPD subscribers will be able to access the app for free, while ESPN Plus subscribers will pay the monthly fee.

“It will enable people to access ESPN just about any way possible. If anything points to the what the future of ESPN looks like, it will be this app.”

ESPN, once the darling of the media giant’s portfolio, has come to be a drag on earnings and the bane of many investors’ assessment of the company. After initially vowing to hew to a more traditional strategy, even as rivals such as CBS and HBO pulled the trigger on stand-alone OTT services, Iger switched course and brought BAMTech into the fold. The white-label OTT shop helped mount HBO Go and the popular WWE subscription app, along with its namesake Major League Baseball streams.

The addition of a new revenue stream can’t come soon enough for ESPN. While it remains dominant in the sports category, it is battling a host of online upstarts such as Turner’s Bleacher Report and the independent Barstool Sports, plus FS1 in the traditional cable space.

In the fiscal first quarter, ESPN’s results reflected softness in advertising. A decrease in ad impressions at the network stemmed from lower average viewership and fewer units delivered. Disney blamed a negative impact on rates and average viewership from the shift in timing of College Football Playoff games.

Media Networks, the division that includes ABC, BAMTech and the cable networks, has historically been a fairly steady profit engine. It had flat performance this quarter, and the cable portion saw revenues inch up just 1% to $4.5 billion and operating income decline 1% to $900 million.