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ESPN, Hulu, and More: What to Expect from Disney in Fiscal 2016

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Part 2
ESPN, Hulu, and More: What to Expect from Disney in Fiscal 2016 PART 2 OF 11

Why Disney Believes that ESPN Will Start Gaining Subscribers

ESPN has lost a few subscribers in the last few years

ESPN is one of the most popular channels among viewers. However, over the last few years, it has continued to lose subscribers as it is considered to be an expensive channel.

The chart below shows that the number of subscribers for ESPN declined from around 99 million in fiscal 2013 to 92 million in fiscal 2015. Despite this loss of subscribers, the Walt Disney Company (DIS) is confident that it will start gaining subscribers for ESPN.

Why Disney Believes that ESPN Will Start Gaining Subscribers

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Disney gives credit for recent ESPN subscriber gains to Sling TV

During the company’s fiscal 1Q16 earnings call, Disney’s chairman and CEO, Bob Iger, noted that ESPN has started to gain subscribers over the last few months. He credited this gain to the inclusion of ESPN in Dish Network’s (DISH) Sling TV over-the-top (or OTT) service.

Sling TV is priced at $20 per month and is a similar OTT (over-the-top) service to Netflix (NFLX). In addition to ESPN, it includes a number of channels such as AMC, Time Warner’s (TWX) TNT, and History. Disney believes Sling TV service has proved to be successful among young consumers, which is also attracting them back to pay-TV.

The company believes that one of the reasons for ESPN’s popularity among viewers is the popularity of live sports. ESPN also holds sports telecasting rights for major sports events in the US including the NFL and Major League Baseball. All these factors make Disney confident that ESPN could start gaining subscribers on a consistent basis.

Dish makes up 0.12% of the Vanguard Growth ETF (VUG). For an investor interested in the information technology sector, VUG holds 29.6% of the sector.

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