{"id":13929,"date":"2023-05-25T22:44:14","date_gmt":"2023-05-26T02:44:14","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/why-disneys-inevitable-move-to-standalone-espn-streaming-service-would-bring-little-risk-ample-reward\/"},"modified":"2023-05-25T22:44:15","modified_gmt":"2023-05-26T02:44:15","slug":"why-disneys-inevitable-move-to-standalone-espn-streaming-service-would-bring-little-risk-ample-reward","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=13929","title":{"rendered":"Why Disney\u2019s \u2018inevitable\u2019 move to standalone ESPN streaming service would bring \u2018little risk, ample reward\u2019"},"content":{"rendered":"
\n

Walt Disney Co. reportedly is \u201cactively preparing\u201d to make ESPN a standalone streaming service, a future that\u2019s sparked mixed reactions on Wall Street. <\/p>\n

A Wall Street Journal report detailing Disney\u2019s
\n DIS,
\n -1.04%<\/bg-quote>
\n consideration of ESPN\u2019s impending streaming future was one reason behind a downgrade of the company\u2019s stock last week, with Macquarie analyst Tim Nollen warning that \u201cit\u2019s hard to see how [the move] will be smooth,\u201d at least initially.<\/p>\n

\n

But Citi Research analyst Jason Bazinet is far more upbeat about the possibility. In his view, investors largely responded with a yawn to the latest report, which Disney hasn\u2019t commented on. Bazinet, however, thinks there should have been more cheers. <\/p>\n

\u201cInvestors view the move to streaming as inevitable,\u201d he wrote. \u201cHowever, at another level, the market\u2019s muted reaction is surprising. We believe ESPN\u2019s transition to streaming could add ~$20 per share to Disney\u2019s equity value.\u201d<\/p>\n

See also: Streaming nirvana is about to become more expensive \u2014 and offer less content<\/strong><\/p>\n

From Bazinet\u2019s perspective, the transition promises \u201clittle risk, ample reward.\u201d He reasons that \u201cthe profit-maximizing price\u201d for a buffed-up version of ESPN+ that would include standalone ESPN content as well would be $22 a month in an ad-free format. <\/p>\n

That average revenue per user \u201cis just above Disney\u2019s U.S. linear revenue per sub across\u00a0all<\/em>\u00a0channels,\u201d he said. Disney has the potential to generate greater revenue from current ESPN+ subscribers who\u2019d presumably trade up to the enhanced version and also attract other sports lovers who\u2019ve already parted ways with traditional cable. <\/p>\n

ESPN+, which does not include ESPN\u2019s live programming, currently costs $9.99 a month and has about 25 million subscribers.<\/p>\n

Bazinet suggests that his calculation of a $22-a-month \u201cprofit-maximizing price\u201d would yield a price-competitive offering, as it\u2019s $3 less than the cost of the YES Network app, which offers access to New York Yankees and Brooklyn Nets programming, and $8 less than the cost of the MSG Network app, which shows New York Knicks, New York Rangers, Buffalo Sabres, New York Islanders and New Jersey Devils content. <\/p>\n

He rates Disney\u2019s stock a buy with a $125 target price.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Walt Disney Co. reportedly is \u201cactively preparing\u201d to make ESPN a standalone streaming service, a future that\u2019s sparked mixed reactions on Wall Street. A Wall Street Journal report detailing Disney\u2019s DIS, -1.04% consideration of ESPN\u2019s impending streaming future was one reason behind a downgrade of the company\u2019s stock last week, with Macquarie analyst Tim Nollen […]<\/p>\n","protected":false},"author":1,"featured_media":13930,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-13929","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nWhy Disney\u2019s \u2018inevitable\u2019 move to standalone ESPN streaming service would bring \u2018little risk, ample reward\u2019 | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Walt Disney Co. reportedly is \u201cactively preparing\u201d to make ESPN a standalone streaming service, a future that\u2019s sparked mixed reactions on Wall Street. 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