Disney predicts up to 12 million ESPN+ subscribers by 2024
ESPN+, Walt Disney's over-the-top sports streaming service, is on target to have between eight and 12 million subscribers by the end of the 2024 fiscal year, according to the media and entertainment giant.
Disney gave a presentation to Wall Street investors on Thursday that went into detail on its streaming strategy for the next few years.
ESPN+, which costs $5 a month at the moment, hit the two-million subscriber mark in February, having launched a year ago as a means for Disney to test the quality of its streaming content, roll out additional content to customers and combat the trend of 'cord-cutting', the cancellation of TV subscription packages. In 2018, ESPN lost 2 million subscribers to cord-cutting, according to its annual report, taking its base from 88 to 86 million.
Disney is still losing money through streaming however, with its direct-to-consumer and international segment having lost $136 million in the fiscal first quarter on revenue of $918 million.
Christine McCarthy, Disney’s chief financial officer, told potential investors that while operating losses for ESPN+ are expected to be $650 million in both 2019 and 2020, the service should reach profitability by 2023.Patrice Cucinello, a director at Fitch Ratings, a New York-based credit rating agency, said: “I view this positively because I think that they need to illustrate the subscriber growth to validate the investment. They’re putting out some very strong number guides to the market. They’re going guns blazing at direct consumer(s).”
Industry analysts have however been more cautious than Disney’s own predictions when it comes to predicted subscriber growth over the next several years.
Morgan Stanley believes 2.7 million people will be paying for ESPN+ access by the end of fiscal 2019 and that by 2022 that number will be 6.7 million.
Analysts at Citi predict the streaming platform will have 4 million paying subscribers by fiscal 2020.
The ESPN+ projections came as Disney announced its new entertainment streaming service Disney+ will launch on 12 November, and cost $70 million per month, or $7 per month.
Disney says it will invest more than $1 billion in the service in 2020 in order to fund original programming, and $2 billion per year by 2024.
The corporation has set a target of 60 million to 90 million subscribers by 2024, at which point it hopes the service will be profitable.Sportcal