Disney explores ditching cable for streaming-only version of ESPN

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Disney is planning to release a streaming version of its flagship ESPN cable channel, according to a report published by the Wall Street Journal on Thursday.

The report said Disney has assembled an internal team to work on a streaming service, code-named “Flagship,” that would offer standalone access to ESPN outside a traditional cable bundle.

The Journal’s story is not a huge surprise: For several years, Disney executives have been pretty vocal that the future of the media business is streaming, especially as more television viewers ditch expensive cable and satellite packages for cheaper online options.

But executives have also cautioned that a streaming version of ESPN will only come when the company feels the time is right — and that could still be years away.

Cable still boosts Disney’s bottom line

According to Disney’s latest financial earnings, its traditional broadcast and cable channels brought in more than $6.6 billion during the first three months of the year.

The figure was seven percent lower than what Disney earned from its TV business during the same period in 2022. However, the division was still wildly profitable for Disney overall, accounting for nearly one-quarter of its $21.9 billion for the period.

By comparison, Disney’s streaming revenue earned $5.514 billion, an increase of 12 percent, but it wasn’t enough to prevent the company from losing $659 million from its streaming services.

Translation?

Even though people are leaving cable and satellite, the company still makes a lot of money from customers who are sticking around with traditional pay TV for a little longer.

While Disney’s streaming ambitions are lofty — the company operates Disney Plus, Hulu, and ESPN Plus — none of those services bring in the same kind of money that cable and satellite do, and that will likely be the case for some time.

The Journal’s report that Disney has assembled a “Flagship” team appears to be more out of preparation than anything, so when the cable and satellite business erodes to the point where streaming brings in more money, Disney is ready with service to bring ESPN to viewers on another platform. 

In the meantime, Disney’s own financial earnings, coupled with comments from executives, strongly suggest Disney will continue pushing its most-premium sports programming — live NFL and NBA games — on the flagship ESPN channel.

This means viewers will still need a cable bundle or cable-like streaming service to watch ESPN for at least a little while longer.

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