Too good to be true, $5 ESPN Plus requires cable subscription

Sports fans were briefly delighted by news of ESPN’s new OTT video service being priced at just $4.99 a month, until details hit home that a cable subscription will be required and ESPN Plus will not include live streaming of main channels ESPN and ESPN2.

Due to launch this Spring, Disney’s long-awaited app is therefore a TV Everywhere offering, merging its ESPN and WatchESPN apps, not quite the game-changing standalone sports subscription service everyone expected. Considering ESPN charges cable companies around $5 a month per subscriber to carry its channels, and cable TV subscribers are declining, there is method in the madness – seeking additional subscription fees direct from consumers, while providing an incentive against cord cutting.

A monthly fee of $4.99 a month on top of your cable subscription will provide access to some live streaming outside of the main events, original and existing on-demand programming, plus features such as news and scores. Disney CEO Bob Iger said “an incremental thousands of hours of live sports programming” will be available on ESPN Plus.

BAMTech is the technology powerhouse behind Disney’s streaming operations, for which details are scarce aside from the new app coming with enhanced personalization. “Users will also enjoy an increasingly personalized experience as the app blends explicit choices with implicit behavior to curate a unique mix of specific, relevant content tailored to the taste of each individual user. The changes will be dramatic, with more compelling visuals as well as an easy, intuitive interface with exceptional video and sound quality,” said Iger on the company’s earnings call.

So ESPN Plus will basically house sports content not popular enough to be aired on ESPN and ESPN2, but there is no doubt Disney will build on its sports streaming service in a big way – once the waters have been thoroughly tested.

When Disney completes the acquisition of 21st Century Fox, for example, Major League Baseball (MLB) rights will be at its disposable. However, an MLB.TV account will be required which Disney is unlikely to throw in for free – meaning an ESPN account, a cable subscription and whatever add-on subscription accounts will all be needed to get the most out of ESPN Plus. Iger has also suggested in the past about adding the option to purchase one-off events – complicating things further.

Disney’s struggling TV networks sector is evident again in the media giant’s fourth quarter earnings filed this week. ESPN performed poorly in the cable networks sector, with revenue down 1% to $4.5 billion. Total revenue grew 4% to $15.35 billion, while net income jumped 78% to $4.4 billion.

Think of ESPN Plus as a test run rather than a disappointment. Disney has mega plans in OTT video – ESPN Plus is not the end product.