- News and analysis
- On the Way to the Recession: Disney
On the Way to the Recession: Disney
Movies and series are not the only sources for income for streaming services. One of the major sources is the broadcasting of sport events. All major streaming platforms are now struggling to get the rights to broadcast the NFL Sunday Ticket. Apple has offered $3 billion for it while Disney and Amazon are left behind with a $2 billion bet. Google has recently joined the competition to take over the broadcast from Youtube.
Nevertheless, Disney made other significant deals to broadcast sports like a $2.7 billion contract with Monday Night Football, contracts with La Liga football, and NHL for another $0.6 billion a year. Disney has more contracts to broadcast more than 22,000 sport events for its ESPN+ channel. And that costs a bulk of money. Disney has raised monthly ESPN+ subscription by $3 to $9.99 compared to $5.99 in 2020 and $4.99 in 2018. Another subscription price hike may stimulate users to switch to the Disney Bundle service that includes Disney+, Hulu and ESPN+. ESPN+ itself generates $4.73 per client, only 4% up compared to 2021. Thus, promoting clients to the larger service could be justified, and may add $72 per client a year. The problem is that a further increase of the cost could not be as successful as the monetisation potential, which is rather limited. The increase of the Disney Bundle subscription cost may churn clients to move to cheaper Disney+ or ESPN+ subscriptions. The company received $4.9 billion in subscription revenues in Q2 2022 with a net operational loss of $0.9 billion. Expensive sport broadcasting licenses is the major reason for such a loss. ESPN+ itself generates $110 million a month but this is not enough to cover licenses fees, even together with advertising revenues. Other streaming giants are generating massive cash flows which they can spend on their development. So, market positions of Disney may suddenly become less sustainable than traditionally considered.
The comments, insights, and reviews posted in this section are solely the opinions and perspectives of authors and do not represent the views or endorsements of RHC Investments or its administrators, except if explicitly indicated. RHC Investments provides a platform for users to share their thoughts on financial market news, investing strategies, and related topics. However, we do not guarantee the accuracy, completeness, or reliability of any user-generated content.
Investment Risks and Advice:
Please be aware that all investment decisions involve risks, and the information shared on metadoro.com should not be considered as financial advice. Always conduct thorough research, seek professional advice, and exercise caution when making investment decisions.
Moderation and Monitoring:
While we strive to maintain a respectful and informative environment, we cannot endorse or verify the accuracy of all user-generated content. We reserve the right to moderate, edit, or remove any comments or posts that violate our community guidelines, infringe on intellectual property rights, or contain harmful content.
By submitting content to metadoro.com, users grant RHC Investments a non-exclusive, royalty-free license to use, display, and distribute the content. Users are responsible for ensuring they have the necessary rights to share the content they post.
To maintain a positive and respectful community, users are expected to adhere to the community guidelines of Metadoro. Any content that is misleading, offensive, or violates applicable laws and regulations will be subject to moderation or removal.
Changes to Disclaimer:
We reserve the right to update, modify, or amend this disclaimer at any time. Users are encouraged to review this disclaimer periodically to stay informed about any changes.