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There is a newer article that I didn't post because it is behind a paywall so I posted the earlier one. Here is the newer link for those that have access.

If you have access to this article, can you post the gist of what they're saying? How much do they estimate that ESPN DTC will cost? (I don't want to bother signing up for a free trial of the NY Post and then cancelling it within 30 days.) Thanks.

I've been saying lately that I believe we'll see Disney bring ESPN out as a standalone DTC service in 2024 or 2025. Who knows, I think they might even divide its live sports into two standalone packages, e.g. ESPN Pro and ESPN College, so that they could have a lower starting price for those who only want part of their overall sports. If that happened, I could imagine either service selling for $15/mo or both together for maybe $22/mo, with discounts either way for those who also subscribe to Disney+.

One analysis I read in the past suggested it would happen when cable TV penetration dips below 50% of US households. Well, we may be there now. MoffettNathanson estimates that penetration fell to just 50.5% of households as of the end of 2Q, three months ago, after sustaining a record drop in pay TV subscriptions that quarter. That brings US cable TV penetration to "the lowest level in more than 30 years" with the result being that "the linear model is hanging by a thread."


I think Disney knows that ESPN is, to a large extent, the foundation stone of the cable bundle. So when they take it DTC (while, of course, still offering ESPN and other linear channels via the bundle), they're going to be fully positioned for the post-cable future. So when ESPN goes DTC, they'll have folded Hulu into Disney+ to make it their single mainstream entertainment app. And they may at that time pull the plug on Hulu with Live TV. Why bother keeping that relic of the past alive?

I imagine when they amend their cable carriage contracts with pay TV operators to allow them to sell ESPN DTC, they'll also make it so that they can sell their linear channels -- ABC (at least the national feed), FX, FXX, Freeform, Nat Geo, Disney Channel, Disney Jr., Disney XD, etc. -- directly to consumers as part of Disney+, with their episodes immediately available on-demand rather than next-day (just as premium services like Showtime have always done in their DTC apps). In other words, the entirety of pay TV offered by Disney, including what is now exclusive to broadcast and cable channels, will be sold directly to consumers via just two apps by 2024 or 2025: Disney+ and ESPN.

One small player in the basic cable space already operates this way: AMC. Their AMC+ app includes live streams of their basic cable linear channels, with all their content available on-demand, with additional non-cable app-exclusive content, i.e. AMC+ Originals, also available.

At about the same time Disney does all that, or within a year afterwards (by the end of 2025), I think we'll see a direct competitor to Disney+ launch in the form of a new service, perhaps named Universal or Universal+. This will be the DTC service offered by an enlarged Universal Group formed when Comcast purchases most or all of Warner Bros Discovery, merges it with NBCUniversal, and then spins that whole thing off as a separate company dedicated, like Disney, to movies, streaming, traditional TV, and theme parks. As I predict for Disney+, I think the Universal DTC app will essentially offer everything available across their linear channels (e.g. NBC, USA, TBS, Cartoon, etc.), probably including the live linear channels themselves, plus additional content exclusive to the app (i.e. what are now known as Max Originals and Peacock Originals). HBO will of course be available too, although it might be an optional add-on instead of part of the core service (as with Showtime and Paramount+). I think there's a decent chance that CNN gets sold off to someone else given that Universal already has NBC News and MSNBC. Same may also happen with some or all of the Discovery basic cable nets (although their biggest personalities, Chip & Joanna Gaines, look set to stick with Warner as their Magnolia has been shifted under HBO's Casey Bloys now).

So once that happens, all the smaller companies that own cable channels will also have to somehow make their cable TV content available DTC as well. Maybe they have their own apps, as AMC+ does now, or maybe they just sub-license their content out to others, as Fox now does with their entertainment content to Hulu.
 

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The other bad assumption is found earlier. The “cable is dying” crew always cite the number of cable/DBS/teleco subscribers as in decline. Leaving out alternative linear providers like YouTubeTV, which has ESPN and is linear. These people are not cord cutters, but cord switchers, still paying for linear channels.
Incorrect. The figures often do include vMVPDs (i.e. streaming cable TV services such as YTTV). I'll quote again here from the story I linked above:

With the small gain among vMVPDs included, the US pay-TV sector lost 1.9 million subs, a record decline of 6.1%, according to MoffettNathanson.

Here's the link again:
Pay-TV picture worsens as sub losses hit 1.9M in Q2

Note that the chart in the story is labelled "Total Pay TV Distribution (Including vMVPDs)."

Another key quote from the article:

MoffettNathanson estimates that the vMVPD "conversation rate" (traditional pay-TV losses that become vMVPD gains) plummeted to 25.6%, off from 40.9% in the year-ago quarter.

Those streaming cable TV services were initially keeping lot of folks cancelling traditional pay TV still on the cable bundle. (I would agree that it's pointless to call those people "cord-cutters" since they're still paying for the cable bundle, just a different way. It's no different, really, than switching from QAM cable TV to satellite. It's still cable TV!)

I don't know if the conversion rate was ever more than half but, as the article states, a year ago, it was about 41%. But that's now down to just over a quarter. The data increasingly seem to suggest that the big growth period for vMVPDs is now over. I think Hulu with Live TV even lost a few subs in Q1. It's particularly easy to pick up and drop vMVPDs and only keep them during the part of the year when your favorite sports/shows are playing.

I suspect the conversion rate from MVPD to vMVPD will go back up somewhat in 3Q and 4Q due to football. And I would bet that the conversion rate of folks leaving DTV Satellite is higher than average because of the convenience of switching to its streaming twin, DTV Stream.

But the bottom line is that cable TV, in all its forms, is in broad irreversible decline. I think the companies running those networks are now admitting that to themselves. And I think that by 2025-26 all of them will be making the entirety of the content they now sell via the linear channel cable TV bundle available through one or more DTC streaming apps.
 
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