ESPN going over the top sounds like a real possibility

ESPN’s rising rights fees and falling subscriber numbers have been hurting parent corporation Disney, dropping its stock in February despite the company’s “greatest single quarter in history,” and now Disney seems interested in investigating some more drastic solutions. ESPN has already worked its way into “skinny-TV” streaming bundles, such as Dish’s Sling TV and Sony’s PlayStation Vue, which are designed to attract cord-cutters or cord-nevers, but it hasn’t taken the next step of offering an over-the-top way to subscribe to ESPN channels alone (which CBS and HBO have done), and some have been skeptical of that idea. Disney CEO Bob Iger, speaking at the Deutsche Bank Media, Internet & Telecom Conference in Palm Beach, Florida on Tuesday, said selling ESPN direct to consumers is “on the table,” though. As Daniel Miller of The Los Angeles Times writes, those comments were part of Iger saying ESPN needs to improve its overall digital strategy:

“I believe in the brand value of ESPN,” said Iger, noting that more than 200 million Americans accessed ESPN content via various platforms during a recent month.

Iger said that ESPN must improve its digital products, noting: “First of all, we think that we’ve got to crack mobile even more successfully than we have before.”  

Among other ventures, ESPN currently offers a website and mobile application that gives subscribers of cable and satellite TV providers the ability to stream live content from the network’s stable of channels.

Iger also said that “some form of direct-to-consumer” offering of ESPN is on the table.

“I don’t think it’s one size fits all,” he said of appealing to consumers’ changing television-consumption habits and desires.

Going to an over-the-top service would carry challenges for ESPN, though. Analyst Rich Greenfield said in December that the idea wasn’t feasible, as many would only want ESPN during particular sports’ seasons, and that Iger’s previous comments on the subject were just him “trying to tell the Street that they are capable of doing something they would never do.”

It would also be difficult for ESPN to recoup the massive subscriber fees they get (which will pass $7 for just the primary ESPN channel in 2017) in an over-the-top setting, and it’s notable that while Iger has talked about this idea before, ESPN president John Skipper hasn’t seemed too interested in an over-the-top standalone product, focusing more on getting into a variety of streaming bundles. We’ll see if Iger and Disney are serious about over-the-top ESPN, or if it is just an idea they’re floating.

[The Los Angeles Times]