DIS Shareholders and Stock Info ONLY

[clarker99]

It will be interesting to see how well/poorly ESPN does on its own. It is notable that DIS appears to be having trouble attracting suitors to do a deal. Might that be a hint?

Not sure they have a lack of interest and I am not sure they are really looking to make a deal right this moment. Feels like they are just seeing what is out there. If they want to maintain a controlling interest that will also turn some folks away.

Kevin Mayer is the chairman of the board of directors for DAZN. DAZN is subsidiary of 'Access Industries' which is owned by a guy worth $35B+. Maybe there is something there for Disney to work with.
https://en.wikipedia.org/wiki/Access_Industries

 

[wabbott]

https://www.cnbc.com/2023/08/03/warner-bros-discovery-wbd-q2-2023-earnings.html

Warner Bros. Discovery loses subscribers after Max launch, but makes headway on debt paydown

Published Thu, Aug 3 2023 - 7:39 AM EDT
by Lillian Rizzo

Key Points

• Warner Bros. Discovery reported second-quarter results Thursday that fell below Wall Street expectations across the board.
• Global direct-to-consumer streaming subscribers at the end of the period were 95.8 million, below Wall Street expectations and a decrease of nearly 2 million from the end of the first quarter.
• Still, the company announced a tender offer aimed to pay down up to $2.7 billion in debt.

In this article

• WBD-0.39 (-3.10%)

Warner Bros. Discovery reported second-quarter results Thursday that fell below Wall Street expectations across the board and revealed subscriber totals that were down from the previous quarter.

Global direct-to-consumer streaming subscribers at the end of the period were 95.8 million, below the 96.7 million subscribers analysts were expecting according to StreetAccount, and a decrease of nearly 2 million from the end of the first quarter.

The company launched its combined Max streaming service during the second quarter, merging HBO content with unscripted hits from the Discovery networks into one platform.

Customers dropping their Discovery+ subscriptions for Max was likely to blame for the drop in subscribers. Data provider Antenna estimated that Discovery+ cancellations were up about 68% compared to June 2022 due to the switchover to Max.

Still, the company said it had repaid $1.6 billion in debt during the quarter and announced a tender offer aimed to pay down up to $2.7 billion more.

It follows a tender offer from June, which also drove the stock. Paying down its heavy debt load stemming from the 2022 merger of Warner Bros. and Discovery has been a focus as the company looks to return to investment grade status by the end of the year.

The company ended the second quarter with $47.8 billion in debt and $3.1 billion in cash on hand.

“The team has worked really hard in the last 16 months to restructure this business for the future to build...a real storytelling company where we can continue to invest our meaningful free cash flow to serve all of our diverse businesses,” CEO David Zaslav said on Thursday’s earnings call. “The de-levering we’re doing now, which is really accelerated — and accelerating — is a key element of making this turn.”

Here’s what the company reported for the quarter ended June 30, versus analysts’ estimates, according to Refinitiv:

• Loss per share: 51 cents vs. 38 cents expected
• Revenue: $10.36 billion vs. $10.44 billion expected

Warner Bros. Discovery reported a net loss of $1.24 billion, or 51 cents per share, a sharp improvement from a net loss of $3.42 billion, or $1.50 per share, a year earlier.

Revenue of $10.36 billion was 5% higher year over year on an actual basis, but 4% lower when taking into account the impact of foreign currency and the merger, which closed in early last year.

Similar to its peers, Warner Bros. Discovery has been working to make its streaming business profitable.

The company’s direct-to-consumer streaming segment turned a profit for the first time during the first quarter of this year, but posted a loss of $3 million for the second quarter. Company executives had warned of that reversal, citing costs associated with the Max launch.

Executives had been planning to combine the two streamers for more than a year as part of the rationale for the merger between Warner Bros. and Discovery. The pricing for subscribers has so far remained the same – $9.99 a month with commercials and $15.99 a month without ads.

Segment results​

Warner Bros. Discovery’s studios dragged down earnings, with total revenue for the segment down 8% to $2.58 billion compared to last year, when the company had a stronger film slate that included “The Batman.” On a pro forma combined basis — factoring in the impact the merger — the segment was down 23%.

CFO Gunnar Wiedenfels said Thursday that the company’s films underperformed at the box office during the second quarter. This past quarter “The Flash” was released in theaters, a flop that barely topped $100 million at domestic box office.

“It’s ironic to have to say that, given how successful ‘Barbie’ has been,” Wiedenfels said, noting the impact of that recent blockbuster will be felt in the third quarter.

Meanwhile the networks segment was essentially flat at $5.76 billion, as advertising revenue dropped for the segment due to the falling number of traditional cable TV subscribers and the soft ad market. On a pro forma combined basis, the segment was down 6%.

The weak ad market, due to the uncertain macroeconomic environment, has been weighing on Warner Bros. Discovery and its media peers in recent quarters. The rate of cord cutting has also accelerated.

Zaslav called the prolonged ad market slowdown “unusual,” noting that while there’s been some improvement, it’s “not anything great.”

“I think a lot of us expected that there would be a meaningful recovery in the second half of the year, and we haven’t seen it,” Zaslav said on Thursday’s earnings call.

He noted that the company was nearly done with its annual pitch to advertisers, known in the industry as upfront discussions. Ad volume is up and pricing levels were consistent with last year, Zaslav said. Last year, Warner Bros. Discovery secured nearly $6 billion in advertiser commitments.

A big driver for the company has been the ad-supported tier on Max, which recently started including advertising on HBO series, in both new and library content. Executives noted advertising revenue for streaming grew 25%, on a pro forma combined basis, during the quarter.

Company executives have previously said they are sticking with the goal of lowering its debt-to-EBITDA leverage to below four times. Any meaningful cash generation will likely go toward repaying its debt, CNBC previously reported.
Cost cutting initiatives including layoffs and content-spending reductions, as well as licensing out more content, has driven adjusted EBITDA — which was up almost 30% to $2.15 billion during the quarter — and cash generation.

 

[wabbott]

https://www.msn.com/en-us/sports/mo...g-tie-ups-with-leagues-and-rivals/ar-AA1eKDmi

Disney's ESPN Plots Its Streaming Future, Seeking Tie-Ups With Leagues and Rivals
Story by Jessica Toonkel, Isabella Simonetti • 8/3/2023 - 2:00 pm EDT

ESPN is hunting for a strategic partner as it tries to bring order to the messy world of streaming—and secure its own future in the process.

Talks with potential partners and investors have touched on several roles ESPN can play in the fragmented streaming industry, from carrying local broadcasts for pro sports teams to serving as an industrywide hub to stream any live game, people familiar with the discussions say.

On another track, ESPN is working to make a stand-alone version of its flagship TV channel available to cord-cutters in two to three years, or once its reach in the cable-TV world falls below 50 million households, people familiar with the plans say.

Major League Baseball has had early talks with ESPN about having the network stream local baseball games in certain markets, people familiar with the matter said. The bankruptcy of the largest local sports TV player, Diamond Sports Group, has led the league to explore new options for delivering games to consumers.

ESPN could offer those baseball games as an add-on to its $9.99-a-month ESPN+ service, but it isn’t interested in paying a big fee for the media rights, as TV broadcasters have done. ESPN sees the potential for similar arrangements with other pro sports leagues.

Bob Iger, CEO of ESPN-parent Disney, announced last month that the sports network was seeking a strategic partner and was open to selling an equity stake. The network, which is led by ESPN chairman Jimmy Pitaro, has talked to other leagues, including the National Basketball Association, National Football League and the National Hockey League.

Media executives say big tech players from Amazon to Google to Apple also would have a lot to offer in helping ESPN reach a big audience and sign up subscribers. ESPN could tie up with more than one strategic partner, people close to the discussions said.

The search for a partner underscores how cord-cutting is upending the sports-media landscape and pushing ESPN to plot a future in streaming. The network has been one of the biggest attractions of the traditional cable-TV bundle, and has delivered big profits for Disney. But its grip is loosening as more people cancel their cable subscriptions and the costs of sports rights rise. In Disney’s most recent quarter, operating income from the TV segment that includes ESPN fell by 35%.

Ed Desser, president of sports-media consulting firm Desser Sports Media and a former senior NBA media executive, said ESPN, in looking for a strategic partner, needs to consider who can help draw in younger viewers and cord-cutters. “That’s the missing link that is important for Disney and ESPN to capture because they have either left the ecosystem or were never part of it,” Desser said.

ESPN isn’t alone in exploring a path for sports in the streaming world. Warner Bros. Discovery said Thursday it is investigating ways to integrate its sports properties into streaming offerings.

ESPN+ is a direct-to-consumer streaming service that carries some live sporting events, as well as scripted and unscripted programs. It doesn’t offer access to the ESPN channel itself, including high-value NBA and NFL telecasts that are only available with a pay-TV subscription.

ESPN is planning to offer a more robust service to bring the network’s full suite of programming to the legion of cord-cutters who don’t sign up for cable, an effort The Wall Street Journal reported was internally code-named “Flagship.” The company will continue to offer the ESPN TV channel after that streaming service launches.

The network hasn’t announced a date for the Flagship launch but will likely feel urgency to act when the number of cable and satellite-TV households that ESPN reaches falls below 50 million, as more people cut the cord. Some 71 million households now have access to ESPN via traditional cable packages or digital distributors like YouTube TV.

When it launches, the Flagship streaming service would carry a premium price—media executives say it could easily reach $30 a month, depending on a number of factors. ESPN is considering keeping ESPN+ in the market so consumers who can do without the full live-sports menu would still have a lower-priced option.

In the shorter term, ESPN is trying to create a tool in its app to let consumers search for and stream all major sports events. For many people, especially cable cord-cutters, figuring out where to watch their favorite teams has become a headache, with leagues parceling out streaming rights to companies like Amazon, Apple and Google while offering their own streaming packages with a variety of restrictions.

CNBC earlier reported on plans to create the live-sports hub and some details of ESPN’s talks with leagues as potential strategic partners.

Creating the new live-sports hub, which is internally dubbed “Marketplace,” requires striking deals with owners of sports rights—from leagues to rival streaming services and tech giants—so that ESPN can link out to their apps. ESPN would make money from those arrangements through a share of revenue or a fee when users sign up to one of its rivals’ services through the ESPN platform, people familiar with the discussions said. The company hopes to complete work on the hub in as soon as a year.

As strategic partners, leagues could supply content for ESPN’s various streaming initiatives. That could create a challenge for leagues with their other media partners, who may want assurances that they are being treated fairly.

ESPN is in the early stages of discussions with the NBA to renew their media partnership, which gives the network rights to many regular season and playoff games, with the finals on Disney’s ABC. The strategic-partnership talks have intersected with that dialogue, people familiar with the talks said.

MLB is trying to sort out a mess in the local sports-broadcasting business. Diamond, whose Bally Sports-branded TV networks pay pro baseball, basketball and hockey teams for the right to broadcast many of their games in local markets, filed for Chapter 11 bankruptcy in March, weighed down by about $8 billion in debt. MLB’s talks with ESPN signal the league is exploring new options to distribute games.

Big tech and telecom companies would bring a different dimension as strategic partners, media executives said, using their vast reach to provide a distribution boost for any new products ESPN brings to the market.

“They have the footprint, the skill sets and they have money,” said Jonathan Miller, chief executive of Integrated Media, which specializes in digital-media investments. Miller is a former executive at Wall Street Journal parent News Corp.

Amazon already has a business, Amazon Channels, that serves as a hub for streaming services from competitors, as does Google through its YouTube Primetime Channels. Verizon operates a subscription-management platform called +play that sells streaming service subscriptions and offers discounts on some bundles.

 

[wabbott]

https://www.msn.com/en-us/money/com...d-ad-misses-outweigh-its-huge-hit/ar-AA1eKxbv

Warner’s Streaming and Ad Misses Outweigh Its Huge Hit
‘Barbie’ will help struggling studio business, but lost streaming subscribers and Hollywood strikes cast shadow
By Dan Gallagher
Aug. 3, 2023 12:28 pm EDT

Even “Barbie” can glam up its maker only so much these days.

Warner Bros. Discovery, the entertainment giant behind the latest box office smash hit, posted notably mixed results for the second quarter on Thursday morning. Revenue slipped 4% year over year to about $10.4 billion, falling a bit short of Wall Street’s projections. That was due to weakness in both advertising and content, as the company—like its other Hollywood peers—is dealing with the twin pressures of a declining cable-TV market and a highly unpredictable box office.

Total advertising revenue fell 13% year over year to $2.5 billion, while revenue from studio content plunged 25% to $2.4 billion during the quarter, which included the disappointing release of “The Flash” from Warner’s DC superhero franchise.

The “Barbie” movie that hit theaters last month will most certainly help that end of the business in the third quarter. That movie has now grossed nearly $804 million globally in its first two weeks and seems likely to cross the $1 billion mark, which would make it the first Warner movie to do so since 2019.

But the rest of the theatrical business remains shaded by the writers’ and actors’ strikes that have effectively shut down productions across Hollywood, while also curbing promotional activities for coming releases. During its conference call Thursday, Warner avoided any mention of two major theatrical movies slated for release this month—“Blue Beetle” and “Meg 2.”

Chief Financial Officer Gunnar Wiedenfels said “release dates and performance expectations are naturally fluid given the ongoing strikes, and we will evaluate our options and update the market accordingly.”

Meanwhile, Warner’s streaming side is having some hiccups of its own. The second quarter included the combination of the company’s HBO Max and Discovery+ streaming services into one platform—which was controversially rebranded as “Max.” The company said it made “significant investments” during the quarter to support the campaign, but not everyone got the message. Domestic streaming subscribers fell by 1.3 million during the quarter—more than the 1.2 million loss expected by analysts.

It wasn’t all bad news. Warner’s intense focus on boosting cash flow to pay down its massive debt load continued to show progress. Free cash flow totaled $1.7 billion in the second quarter, and Wiedenfels projected the same for the third quarter—both well ahead of Wall Street’s targets. But that includes some help from the strikes, as production shutdowns don’t require cash going out the door. Ultimately, Warner and its studio peers need Hollywood to get back to work—even if it costs them.

Write to Dan Gallagher at dan.gallagher@wsj.com

 

[Elijah Abrams]

https://www.cnbc.com/2023/08/03/warner-bros-discovery-wbd-q2-2023-earnings.html

Warner Bros. Discovery loses subscribers after Max launch, but makes headway on debt paydown

Published Thu, Aug 3 2023 - 7:39 AM EDT
by Lillian Rizzo

Key Points

• Warner Bros. Discovery reported second-quarter results Thursday that fell below Wall Street expectations across the board.
• Global direct-to-consumer streaming subscribers at the end of the period were 95.8 million, below Wall Street expectations and a decrease of nearly 2 million from the end of the first quarter.
• Still, the company announced a tender offer aimed to pay down up to $2.7 billion in debt.

In this article

• WBD-0.39 (-3.10%)

Warner Bros. Discovery reported second-quarter results Thursday that fell below Wall Street expectations across the board and revealed subscriber totals that were down from the previous quarter.

Global direct-to-consumer streaming subscribers at the end of the period were 95.8 million, below the 96.7 million subscribers analysts were expecting according to StreetAccount, and a decrease of nearly 2 million from the end of the first quarter.

The company launched its combined Max streaming service during the second quarter, merging HBO content with unscripted hits from the Discovery networks into one platform.

Customers dropping their Discovery+ subscriptions for Max was likely to blame for the drop in subscribers. Data provider Antenna estimated that Discovery+ cancellations were up about 68% compared to June 2022 due to the switchover to Max.

Still, the company said it had repaid $1.6 billion in debt during the quarter and announced a tender offer aimed to pay down up to $2.7 billion more.

It follows a tender offer from June, which also drove the stock. Paying down its heavy debt load stemming from the 2022 merger of Warner Bros. and Discovery has been a focus as the company looks to return to investment grade status by the end of the year.

The company ended the second quarter with $47.8 billion in debt and $3.1 billion in cash on hand.

“The team has worked really hard in the last 16 months to restructure this business for the future to build...a real storytelling company where we can continue to invest our meaningful free cash flow to serve all of our diverse businesses,” CEO David Zaslav said on Thursday’s earnings call. “The de-levering we’re doing now, which is really accelerated — and accelerating — is a key element of making this turn.”

Here’s what the company reported for the quarter ended June 30, versus analysts’ estimates, according to Refinitiv:

• Loss per share: 51 cents vs. 38 cents expected
• Revenue: $10.36 billion vs. $10.44 billion expected

Warner Bros. Discovery reported a net loss of $1.24 billion, or 51 cents per share, a sharp improvement from a net loss of $3.42 billion, or $1.50 per share, a year earlier.

Revenue of $10.36 billion was 5% higher year over year on an actual basis, but 4% lower when taking into account the impact of foreign currency and the merger, which closed in early last year.

Similar to its peers, Warner Bros. Discovery has been working to make its streaming business profitable.

The company’s direct-to-consumer streaming segment turned a profit for the first time during the first quarter of this year, but posted a loss of $3 million for the second quarter. Company executives had warned of that reversal, citing costs associated with the Max launch.

Executives had been planning to combine the two streamers for more than a year as part of the rationale for the merger between Warner Bros. and Discovery. The pricing for subscribers has so far remained the same – $9.99 a month with commercials and $15.99 a month without ads.

Segment results​

Warner Bros. Discovery’s studios dragged down earnings, with total revenue for the segment down 8% to $2.58 billion compared to last year, when the company had a stronger film slate that included “The Batman.” On a pro forma combined basis — factoring in the impact the merger — the segment was down 23%.

CFO Gunnar Wiedenfels said Thursday that the company’s films underperformed at the box office during the second quarter. This past quarter “The Flash” was released in theaters, a flop that barely topped $100 million at domestic box office.

“It’s ironic to have to say that, given how successful ‘Barbie’ has been,” Wiedenfels said, noting the impact of that recent blockbuster will be felt in the third quarter.

Meanwhile the networks segment was essentially flat at $5.76 billion, as advertising revenue dropped for the segment due to the falling number of traditional cable TV subscribers and the soft ad market. On a pro forma combined basis, the segment was down 6%.

The weak ad market, due to the uncertain macroeconomic environment, has been weighing on Warner Bros. Discovery and its media peers in recent quarters. The rate of cord cutting has also accelerated.

Zaslav called the prolonged ad market slowdown “unusual,” noting that while there’s been some improvement, it’s “not anything great.”

“I think a lot of us expected that there would be a meaningful recovery in the second half of the year, and we haven’t seen it,” Zaslav said on Thursday’s earnings call.

He noted that the company was nearly done with its annual pitch to advertisers, known in the industry as upfront discussions. Ad volume is up and pricing levels were consistent with last year, Zaslav said. Last year, Warner Bros. Discovery secured nearly $6 billion in advertiser commitments.

A big driver for the company has been the ad-supported tier on Max, which recently started including advertising on HBO series, in both new and library content. Executives noted advertising revenue for streaming grew 25%, on a pro forma combined basis, during the quarter.

Company executives have previously said they are sticking with the goal of lowering its debt-to-EBITDA leverage to below four times. Any meaningful cash generation will likely go toward repaying its debt, CNBC previously reported.
Cost cutting initiatives including layoffs and content-spending reductions, as well as licensing out more content, has driven adjusted EBITDA — which was up almost 30% to $2.15 billion during the quarter — and cash generation.

https://www.msn.com/en-us/money/com...d-ad-misses-outweigh-its-huge-hit/ar-AA1eKxbv

Warner’s Streaming and Ad Misses Outweigh Its Huge Hit
‘Barbie’ will help struggling studio business, but lost streaming subscribers and Hollywood strikes cast shadow
By Dan Gallagher
Aug. 3, 2023 12:28 pm EDT

Even “Barbie” can glam up its maker only so much these days.

Warner Bros. Discovery, the entertainment giant behind the latest box office smash hit, posted notably mixed results for the second quarter on Thursday morning. Revenue slipped 4% year over year to about $10.4 billion, falling a bit short of Wall Street’s projections. That was due to weakness in both advertising and content, as the company—like its other Hollywood peers—is dealing with the twin pressures of a declining cable-TV market and a highly unpredictable box office.

Total advertising revenue fell 13% year over year to $2.5 billion, while revenue from studio content plunged 25% to $2.4 billion during the quarter, which included the disappointing release of “The Flash” from Warner’s DC superhero franchise.

The “Barbie” movie that hit theaters last month will most certainly help that end of the business in the third quarter. That movie has now grossed nearly $804 million globally in its first two weeks and seems likely to cross the $1 billion mark, which would make it the first Warner movie to do so since 2019.

But the rest of the theatrical business remains shaded by the writers’ and actors’ strikes that have effectively shut down productions across Hollywood, while also curbing promotional activities for coming releases. During its conference call Thursday, Warner avoided any mention of two major theatrical movies slated for release this month—“Blue Beetle” and “Meg 2.”

Chief Financial Officer Gunnar Wiedenfels said “release dates and performance expectations are naturally fluid given the ongoing strikes, and we will evaluate our options and update the market accordingly.”

Meanwhile, Warner’s streaming side is having some hiccups of its own. The second quarter included the combination of the company’s HBO Max and Discovery+ streaming services into one platform—which was controversially rebranded as “Max.” The company said it made “significant investments” during the quarter to support the campaign, but not everyone got the message. Domestic streaming subscribers fell by 1.3 million during the quarter—more than the 1.2 million loss expected by analysts.

It wasn’t all bad news. Warner’s intense focus on boosting cash flow to pay down its massive debt load continued to show progress. Free cash flow totaled $1.7 billion in the second quarter, and Wiedenfels projected the same for the third quarter—both well ahead of Wall Street’s targets. But that includes some help from the strikes, as production shutdowns don’t require cash going out the door. Ultimately, Warner and its studio peers need Hollywood to get back to work—even if it costs them.

Write to Dan Gallagher at dan.gallagher@wsj.com

David Zaslav needs to go!

https://www.msn.com/en-us/sports/mo...g-tie-ups-with-leagues-and-rivals/ar-AA1eKDmi

Disney's ESPN Plots Its Streaming Future, Seeking Tie-Ups With Leagues and Rivals
Story by Jessica Toonkel, Isabella Simonetti • 8/3/2023 - 2:00 pm EDT

ESPN is hunting for a strategic partner as it tries to bring order to the messy world of streaming—and secure its own future in the process.

Talks with potential partners and investors have touched on several roles ESPN can play in the fragmented streaming industry, from carrying local broadcasts for pro sports teams to serving as an industrywide hub to stream any live game, people familiar with the discussions say.

On another track, ESPN is working to make a stand-alone version of its flagship TV channel available to cord-cutters in two to three years, or once its reach in the cable-TV world falls below 50 million households, people familiar with the plans say.

Major League Baseball has had early talks with ESPN about having the network stream local baseball games in certain markets, people familiar with the matter said. The bankruptcy of the largest local sports TV player, Diamond Sports Group, has led the league to explore new options for delivering games to consumers.

ESPN could offer those baseball games as an add-on to its $9.99-a-month ESPN+ service, but it isn’t interested in paying a big fee for the media rights, as TV broadcasters have done. ESPN sees the potential for similar arrangements with other pro sports leagues.

Bob Iger, CEO of ESPN-parent Disney, announced last month that the sports network was seeking a strategic partner and was open to selling an equity stake. The network, which is led by ESPN chairman Jimmy Pitaro, has talked to other leagues, including the National Basketball Association, National Football League and the National Hockey League.

Media executives say big tech players from Amazon to Google to Apple also would have a lot to offer in helping ESPN reach a big audience and sign up subscribers. ESPN could tie up with more than one strategic partner, people close to the discussions said.

The search for a partner underscores how cord-cutting is upending the sports-media landscape and pushing ESPN to plot a future in streaming. The network has been one of the biggest attractions of the traditional cable-TV bundle, and has delivered big profits for Disney. But its grip is loosening as more people cancel their cable subscriptions and the costs of sports rights rise. In Disney’s most recent quarter, operating income from the TV segment that includes ESPN fell by 35%.

Ed Desser, president of sports-media consulting firm Desser Sports Media and a former senior NBA media executive, said ESPN, in looking for a strategic partner, needs to consider who can help draw in younger viewers and cord-cutters. “That’s the missing link that is important for Disney and ESPN to capture because they have either left the ecosystem or were never part of it,” Desser said.

ESPN isn’t alone in exploring a path for sports in the streaming world. Warner Bros. Discovery said Thursday it is investigating ways to integrate its sports properties into streaming offerings.

ESPN+ is a direct-to-consumer streaming service that carries some live sporting events, as well as scripted and unscripted programs. It doesn’t offer access to the ESPN channel itself, including high-value NBA and NFL telecasts that are only available with a pay-TV subscription.

ESPN is planning to offer a more robust service to bring the network’s full suite of programming to the legion of cord-cutters who don’t sign up for cable, an effort The Wall Street Journal reported was internally code-named “Flagship.” The company will continue to offer the ESPN TV channel after that streaming service launches.

The network hasn’t announced a date for the Flagship launch but will likely feel urgency to act when the number of cable and satellite-TV households that ESPN reaches falls below 50 million, as more people cut the cord. Some 71 million households now have access to ESPN via traditional cable packages or digital distributors like YouTube TV.

When it launches, the Flagship streaming service would carry a premium price—media executives say it could easily reach $30 a month, depending on a number of factors. ESPN is considering keeping ESPN+ in the market so consumers who can do without the full live-sports menu would still have a lower-priced option.

In the shorter term, ESPN is trying to create a tool in its app to let consumers search for and stream all major sports events. For many people, especially cable cord-cutters, figuring out where to watch their favorite teams has become a headache, with leagues parceling out streaming rights to companies like Amazon, Apple and Google while offering their own streaming packages with a variety of restrictions.

CNBC earlier reported on plans to create the live-sports hub and some details of ESPN’s talks with leagues as potential strategic partners.

Creating the new live-sports hub, which is internally dubbed “Marketplace,” requires striking deals with owners of sports rights—from leagues to rival streaming services and tech giants—so that ESPN can link out to their apps. ESPN would make money from those arrangements through a share of revenue or a fee when users sign up to one of its rivals’ services through the ESPN platform, people familiar with the discussions said. The company hopes to complete work on the hub in as soon as a year.

As strategic partners, leagues could supply content for ESPN’s various streaming initiatives. That could create a challenge for leagues with their other media partners, who may want assurances that they are being treated fairly.

ESPN is in the early stages of discussions with the NBA to renew their media partnership, which gives the network rights to many regular season and playoff games, with the finals on Disney’s ABC. The strategic-partnership talks have intersected with that dialogue, people familiar with the talks said.

MLB is trying to sort out a mess in the local sports-broadcasting business. Diamond, whose Bally Sports-branded TV networks pay pro baseball, basketball and hockey teams for the right to broadcast many of their games in local markets, filed for Chapter 11 bankruptcy in March, weighed down by about $8 billion in debt. MLB’s talks with ESPN signal the league is exploring new options to distribute games.

Big tech and telecom companies would bring a different dimension as strategic partners, media executives said, using their vast reach to provide a distribution boost for any new products ESPN brings to the market.

“They have the footprint, the skill sets and they have money,” said Jonathan Miller, chief executive of Integrated Media, which specializes in digital-media investments. Miller is a former executive at Wall Street Journal parent News Corp.

Amazon already has a business, Amazon Channels, that serves as a hub for streaming services from competitors, as does Google through its YouTube Primetime Channels. Verizon operates a subscription-management platform called +play that sells streaming service subscriptions and offers discounts on some bundles.

How about just kill streaming services instead? They don't make revenue.

 

[RivShore]

WBD 8% rise so far today after some disappointing streaming news with yesterday's earnings. Apparently streaming is getting some love today with DIS up over 1%.

 

[clarker99]

WBD 8% rise so far today after some disappointing streaming news with yesterday's earnings. Apparently streaming is getting some love today with DIS up over 1%.

Pretty sure WBD is the only other company that has shown a streaming profit besides Netflix. It is small but WBD DTC segment has an OI of $47m this FY23.

 

[clarker99]

Pretty sure WBD is the only other company that has shown a streaming profit besides Netflix. It is small but WBD DTC segment has an OI of $47m this FY23.

https://ir.wbd.com/financials/quarterly-results/default.aspx

Yes, I am correct on the DTC segment:
Q1 $50m OI
Q2 -$3m OI

They said DTC incurred some extra costs with the revamped Max setup/launch in Q2 other wise it would have been black.

 

[wabbott]

https://finance.yahoo.com/news/not-just-disney-losing-customers-181043028.html

It’s not just Disney losing customers—nearly 2 million people stopped subscribing to Warner Bros. Discovery’s streaming service
Christiaan Hetzner
Fri, August 4, 2023 at 1:10 PM CDT

Disney CEO Bob Iger hemorrhaged 4 million streaming subscribers in its fiscal second quarter after his company’s India-based Hotstar video platform lost the rights to Indian Premier League cricket matches.

Now its David Zaslav’s turn to bleed business after his heavily criticized rebrand of Max, which involved dumping one of the most recognizable names in entertainment—HBO—when merging the respective platforms of Warner Bros. and Discovery in May.

The bane of any streaming service is churn: subscribers signing up one month to take advantage of a special offer before jettisoning their membership shortly afterwards, often in favor of a rival platform. Now Warner Bros. Discovery reported on Thursday that some 1.8 million paying customers set sail for other shores in the second quarter over the preceding three months, and it’s a good bet some of those who left may have even wound up at Comcast’s rival platform Peacock.

“We said we were going to build a strong, sustainable direct-to-consumer strategy focused on profitable growth as
opposed to chasing subs at any cost,” Zaslav told investors.

The problem for Zaslav, the most overpaid CEO in America last year according to one study, is that the bulk of those subscribers lost—roughly 1.3 million—were the more lucrative U.S. customers who generated on average $11.09 in revenue per user during the quarter versus just $3.65 for its international subscribers.

“While we have seen some expected subscriber disruption, we have experienced lower-than-expected churn throughout this process,” he offered.

The problem all media giants face now is the immensely profitable business model of linear broadcasting is broken because an increasing number of cable subscribers are cutting the cord so they can view content on demand rather than when a network exec decides on their behalf.

Over time, the economics of the business will deteriorate, which is why Iger is considering a yard sale—possibly selling stakes in ESPN and ABC—to maximize the value while he still can.

Disney’s moment of truth next week

Offering the convenience of at-home or on-the-go streaming has been the industry’s natural answer to the shift in consumer habits. And, at least in theory, selling subscriptions comes with the added benefit of recurring revenue that is supposedly stable and predictable in an age of volatility, but in practice the economics aren’t holding up.

Yet no one apart from Netflix—the first to market—has been able to escape the rivers of red ink.

“We estimate they are all losing money, with combined 2022 operating losses well over $10 billion, versus Netflix’s $5 [billion] to $6 billion annual operating profit,” Netflix said in October about the competition.

At least Warner Bros. Discovery’s streaming division managed to nearly break even with a negligible $3 million, a half billion-dollar improvement over the previous year’s period. But the company still predicts that only its U.S. streaming business, which accounts for little more than half its streaming customers, will be profitable this year.

Now streaming execs have raised the white flag in capitulation, with Disney leading the retreat.

After Disney incurred over $10 billion in cumulative streaming losses since launching Disney+ in 2019, the company pledged last August to introduce a new lower-price streaming tier supported by ads. Then, in February, it unveiled $3 billion in production budget cuts.

Finally Disney even announced an impairment charge of up to $1.8 billion to reflect the cost of removing shows from its streaming platform that increase the cost of its cloud hosting bills, including some of its own original programming.

Investors will find out just how Disney+ is faring when the company reports fiscal third-quarter results on Aug. 9. But executives already warned its streaming business will likely see operating losses widen by around $100 million over the previous quarter to around $750 million owing to a shift in the timing of marketing expenses.

 

[Cfabar1]

Disney+ is definitely impacting box office. Much easier to say I'll wait to see it on Disney+. It has to be impacting the digital sales and DVD purchases too. Was thinking of watching the new LM, which can now be bought on iTunes (but not rented). Decided, I'll wait a couple more weeks and I'm sure it'll be on Disney+. The $2.99 I pay for Disney+ is hardly generating enough revenue... They need to rethink the ENTIRE model, and shed lots of consumers, but make it profitable.

The problem is, nobody wants to unilaterally disarm. Netflix prepared for this moment for a long time, and I think if these guys are not careful, it's going to be a Netflix world in which them (and us) are all invited guests. Netflix does not have a great track record with producing content, so that may be the one thing that keeps these studios around.

 

[clarker99]

Disney\+ is very underpriced. Netflix makes $16-$17/user in USA/Canada. Dis+ averaged $7.15 last quarter.. So, you can see where Disney will end up over time.

 

[HokieRaven5]

Disney+ is definitely impacting box office. Much easier to say I'll wait to see it on Disney+. It has to be impacting the digital sales and DVD purchases too. Was thinking of watching the new LM, which can now be bought on iTunes (but not rented). Decided, I'll wait a couple more weeks and I'm sure it'll be on Disney+. The $2.99 I pay for Disney+ is hardly generating enough revenue... They need to rethink the ENTIRE model, and shed lots of consumers, but make it profitable.

The problem is, nobody wants to unilaterally disarm. Netflix prepared for this moment for a long time, and I think if these guys are not careful, it's going to be a Netflix world in which them (and us) are all invited guests. Netflix does not have a great track record with producing content, so that may be the one thing that keeps these studios around.

Netflix also appears to have 0 interest in coming to the negotiating table with those on strike.

I think something like 70% of the content viewed on Netflix is produced by other studios while they have gotten to the point where half of their library is produced in house.

 

[wabbott]

Disney\+ is very underpriced. Netflix makes $16-$17/user in USA/Canada. Dis+ averaged $7.15 last quarter.. So, you can see where Disney will end up over time.

Except that at some price point, Disney+ will lose even more customers.

 

[clarker99]

Except that at some price point, Disney+ will lose even more customers.

With every increase they would expect churn. The numbers look scary but after the next round of prices increases this fall, I think they are going to be close break when you combine the increase with the cost cuts.

It is almost entirely about costs for streaming at the moment. My focus will be on Disney’s SG & A in FY23 vs the $5.7b in FY22.

 

[Cfabar1]

Disney\+ is very underpriced. Netflix makes $16-$17/user in USA/Canada. Dis+ averaged $7.15 last quarter.. So, you can see where Disney will end up over time.

Yes. And I’m sure that’s why Iger quickly realized they needed Hulu to make the plane fly. Disney+ is too niche a product on its own to justify the expense and so he has become fond of using the phrase “general entertainment”.

I’d be more curious to know for a Disney+/Hulu joint customer what is the profitability. At full price probably not too far off from the Netflix number. But who in their right mind would actually pay full price with no promotions or discounts for this product? There are so many of them out there in the atmosphere and getting customers to pay full price when they’re conditioned to discounting is going to be really difficult to do while cutting content.

 

[irlandaise]

https://finance.yahoo.com/news/not-just-disney-losing-customers-181043028.html

The bane of any streaming service is churn: subscribers signing up one month to take advantage of a special offer before jettisoning their membership shortly afterwards, often in favor of a rival platform. Now Warner Bros. Discovery reported on Thursday that some 1.8 million paying customers set sail for other shores in the second quarter over the preceding three months, and it’s a good bet some of those who left may have even wound up at Comcast’s rival platform Peacock.

Given that Comcast has millions and millions of cable TV subscribers who get Peacock for free, is there any way to know how many Peacock subscribers actually pay for the service? That linked article from The Verge didn't differentiate. Maybe as far as Comcast as concerned they're all paying customers, if the Xfinity division has to pay the NBC division for Peacock use. But the article says Peacock has 24M subscribers and I found info that Xfinity has about 15M, so there may only be 9M households that have actually decided that Peacock is worth paying for.

I'm bringing this up because that article's author made a vague guess about Peacock subscribers that would be very hard to confirm given the way the service is distributed. I think any discussion of Peacock's role in the streaming wars has to take that situation into account.

 

[HokieRaven5]

Given that Comcast has millions and millions of cable TV subscribers who get Peacock for free, is there any way to know how many Peacock subscribers actually pay for the service? That linked article from The Verge didn't differentiate. Maybe as far as Comcast as concerned they're all paying customers, if the Xfinity division has to pay the NBC division for Peacock use. But the article says Peacock has 24M subscribers and I found info that Xfinity has about 15M, so there may only be 9M households that have actually decided that Peacock is worth paying for.

I'm bringing this up because that article's author made a vague guess about Peacock subscribers that would be very hard to confirm given the way the service is distributed. I think any discussion of Peacock's role in the streaming wars has to take that situation into account.

Comcast has slowly been removing the free access to at least the Premium Peacock through Xfinity since the end of June

 

[irlandaise]

Comcast has slowly been removing the free access to at least the Premium Peacock through Xfinity since the end of June

Ah, thanks. I moved out of Comcast territory a few months ago and didn't realize they were discontinuing the free access. I wonder how many people will pay to keep the service--and also whether Comcast has been counting all those free viewers as subscribers and thus whether they now have to adjust their subscribers number. Well at least if they discontinue the freebie it will allow analysts to make a more accurate comparison between Peacock and other streaming services.

 

[Cfabar1]

Many subscribers receive peacock premium free from American Express. I wouldn’t be surprised if that numbered in the millions.

 

[afan]

Many subscribers receive peacock premium free from American Express. I wouldn’t be surprised if that numbered in the millions.

That's only if they opt to use digital credit for it. I use the digital credit on my plat to pay most of the hulu/espn/d+ bundle and mostly use Hulu and ESPN during hockey season.

Had peacock through comcast for free with our internet but are ones that had it cut. Probably need to find out if I can save on the internet now too. It's annoying they took it away but I rarely used it. Will sign up at some point so I can watch super mario though but only for a month.