Disney Goes Digital
Disney set off a sonic boom in Hollywood by unveiling plans to start two Netflix-style services: For the first time in the streaming age, the world’s largest media company had decided that embracing a new business model was more important than clinging to its existing one.
Disney’s decision to better align itself with consumer trends — deemed “a rare and impressive pivot” by RBC Capital Markets — instantly reverberated through the entertainment industry. Disney’s cable channels, which include ESPN, have long been seen as the reason many viewers were refraining from cutting the cord entirely. If Disney was going all in on streaming, the impact would be felt by almost every television company and cable operator.
Disney’s streaming plans call for the introduction early next year of a subscription service to be built around ESPN’s sports programming. It will be powered by BamTech, a technology company that handles direct-to-consumer video for baseball teams and HBO, among others. But this still-unnamed subscription service is designed to protect the cable bundle, at least initially. The service will offer only sports programming that is not available on ESPN’s traditional channels. Only people who also pay to receive ESPN the old-fashioned way (via a cable or satellite hookup) will be able to stream ESPN’s core offerings, including N.F.L. and N.B.A. games.
Netflix, Amazon, HBO Now, CBS All Access and Hulu (part-owned by Disney) are all barreling ahead online. FX is dipping a toe in the water with Comcast. AMC has done the same. And now comes Disney with two services, which will undoubtedly prod other entertainment giants to move beyond niche direct-to-consumer offerings.
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