The ESPN+ subscriber numbers are in and they’ve started to flatten out—but not for long.
On August 6, Disney announced that ESPN+ had reached 2.4 million subscribers, up 400,000 from the 2 million mark it hit earlier this year. While the number is nothing to scoff, it’s less than half the subscriber growth over the previous six-month period, which saw the service add 1 million patrons between September of last year into February of 2019. It’s not known how many of the subscribers are paying customers and how many are simply signed up for the free trial service.
Although overall numbers seem to be plateauing, the original growth of the service included several one-time events that bolstered the sharp rise in subscription numbers in the first place. When the service reached 1 million total subscribers last September, a fair amount of that number was attributed to ESPN Insider customers who migrated over to ESPN+. In January the service gained 568,000 new customers when the UFC held their first event on the OTT streaming platform, and while the exact number of subscribers who dropped off after the free trial is again not known, it’s safe to say that the UFC coming to ESPN+ had an impact on the 1 million customer increase the service experienced during Q4 of 2018 and Q1 of this year.
Even if all 2.4 million subscribers were paying the $4.99/month price, the number is still not where it needs to be to make the service profitable, as it wouldn’t even cover the cost of UFC content alone.
With that being said, ESPN’s parent company has a plan to stave off the subscription slowdown. Earlier this week, Disney announced that it would be bundling its streaming service Disney+ with Hulu and ESPN+ for the low cost of $12.99 per month. Although bundling the three services was always expected, the price point and decision to do so before officially launching Disney+ is an aggressive move by the Walt Disney Company, signaling the organization’s desire to be a major player in the streaming market. Given the large catalog of content that each service provides and their respective stand-alone price points (ESPN at $4.99, Hulu at $5.99 with ads, and Disney+ at $6.99) the bundle will appeal to a large audience, specifically current subscribers that already have one service and were looking to add Disney+.
While ESPN+ numbers will likely increase as Hulu subscribers that want Disney+ will essentially be able to receive the OTT sports streaming service for free, an important side effect of the decision to bundle will be that the revenue streams from each service will officially be mixed together. If a new customer signs up for a bundle it will be harder to pinpoint exactly which services they are willing to pay for, and as a result subscription numbers from each individual service may have less weight compared to the combined total number of subscribers. Although there is no way to verify that this will be the case, given Disney’s eagerness to take on Netflix and Amazon Prime video its hardly a stretch of the imagination.
How many people will take advantage of the bundle is yet to be seen, but there is already a fair amount of buzz around it. With Disney acquiring film and TV assets from 21st Century Fox for a whopping $71.3 billion earlier this year, including popular movies and television shows like Titanic and The Simpsons, its hard to imagine they’ll have trouble enticing consumers that are finally looking to cut the cable cord or don’t find Netflix’s options to their liking.
With traditional ESPN subscribers declining and ESPN+ being viewed as the future of the sports broadcasting network, consolidating the service with other offerings will take pressure off of the platform and bring less scrutiny to programming costs, such as the UFC and PFL deals. As ESPN+ looks to continue its growth, its success will be crucial to its MMA industry partners, especially if certain partners are looking to go public.