Eyes on ESPN
Bigger picture, MoffettNathanson is keeping close tabs on how national and regional sports networks, considered the glue holding the pay-TV bundle together, could further impact subscriber losses in the future.
In a
recent report that tied in new survey data from Altman Solon, MoffettNathanson suggested that there are about 58 million sports viewing households still taking the pay-TV bundle, representing "a potential floor for linear subscribers over time."
Should Disney decide one day to take ESPN fully direct-to-consumer (DTC), MoffettNathanson believes it could "trigger a complete collapse of the system." Thus far, Disney has taken a more conservative path with ESPN+, a premium subscription add-on. That approach has contributed to a relatively orderly decline of pay-TV.
"But there is clearly a risk that the declines become
disorderly," the analysts explained. "All it would take is one major player – ESPN is the obvious candidate – to decide that the future demands a bolder shift in their best programming to DTC, or, alternatively, that their entire suite of programming should be simultaneously available DTC... and the Jenga tower would collapse."