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How Could ESPN’s Streaming Service Differ from Its WatchESPN App?

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Disney’s WatchESPN app

The Walt Disney Company’s (DIS) WatchESPN is an authenticated app that live streams sports events from ESPN’s US (SPY) television networks on Internet-connected devices. The app provides limited access to content for non-subscribers.

On August 8, Disney was asked during its fiscal 3Q17[1. fiscal 3Q17 ended July 1, 2017] earnings call how ESPN’s direct-to-consumer service could affect the WatchESPN app. Disney’s chairman and CEO, Bob Iger, replied that the company did not “intend to migrate product off the primary linear services.” Disney’s management stated that it expected ESPN’s direct-to-consumer service to have an inventory of 10,000 live events.

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Disney added that ESPN’s direct-to-consumer service would be different from its WatchESPN app. The company stated that with its majority stake in BAMTech, ESPN’s direct-to-consumer service would have an improved technology platform that would include credit card and password management, onboarding of subscribers, and subscriber retention technology.

Disney added that the direct-to-consumer service would provide targeted advertising technology that could boost the company’s advertising revenues in the process.

Reason behind Disney’s direct-to-consumer service

In the previous part of this series, we discussed some of the reasons behind Disney’s decision to go direct-to-consumer for ESPN. Another factor influencing Disney’s decision could be the rising popularity of video streaming services. 

According to a TiVO 4Q16 video trend report, and as indicated by the chart above, Netflix (NFLX) leads the OTT (over-the-top) market with an ~53% share.

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