ESPN+ saw a boost in subscribers around the Jan. 19 debut of UFC on the platform GETTY IMAGES
Disney during its Q1 earnings report yesterday said it now has 2 million subscribers for ESPN+, "double the number it had" just five months ago, though it is "still losing money," according to CNBC's Melissa Lee. Winview Exec Chair Tom Rogers noted ESPN paid $300M for UFC rights, and the package made its debut on ESPN+ on Jan. 19. Rogers noted ESPN+ will "probably need 3 million subs just to cover that one rights contract," though they have already "had some nice sub adds." Rogers: “You’ve really got to look at now how they have to cover rights costs against something where they can only get revenue from the people who are actually going to watch" ("Squawk Box," CNBC, 2/6). MediaTech Capital Partners Managing Partner Porter Bibb said there is "no question" ESPN will make ESPN+ profitable, but the “big unknown right now in terms of timing is online betting, which is going to be the bonanza for ESPN since it has a lock on the majority of live sports" ("Worldwide Exchange," CNBC, 2/6). Disney Chair & CEO Bob Iger during the company's earnings call yesterday said that ESPN was "already talking about wagering and broadcasting information of interest to bettors" in some of its programming (BROADCASTINGCABLE.com, 2/5).
ON THE PLUS SIDE OF THINGS: The WALL STREET JOURNAL's Schwartzel & Armental report Disney posted a Q1 loss of $136M, "largely due to preparing for what is to come: an increased investment" in ESPN+ and costs "associated with preparing for the launch of Disney+." Disney said that taking its movies and shows off Netflix "will cause a loss" of $150M per year in licensing income. ESPN+ saw nearly 600,000 "new users sign up last month" in anticipation of the debut of UFC on the service. Iger said that marketing ESPN+ on traditional networks has been an "effective way to attract subscribers," and that Disney+ will be "promoted across the company's other divisions" (WALL STREET JOURNAL, 2/6). CNBC contributor Pete Najarian said Disney has "been slow" to embrace direct-to-consumer channels, but it is "finally in the process of doing it." Najarian: "They've still got to make up a lot of room." CNBC contributor Dan Nathan said investors are "going to give them a little time to figure this out" ("Fast Money," CNBC, 2/5). In L.A., Ryan Faughnder notes operating income from Disney's media networks business, including ABC and ESPN, grew 7% to $1.3B, "thanks to higher broadcasting revenue" (L.A. TIMES, 2/6). Disney's "profit in cable TV," led by ESPN, slipped 6% (ADAGE.com, 2/5).
