This chart shows why the new sports streamer is going to cost $50

We don't know a lot about the big sports streaming service that's supposed to launch this fall — like what it's going to be called and who's going to run it.

But we're pretty sure it's going to be priced around $50.

That's in part because outlets like CNBC and The Wall Street Journal have talked to sources at the streamer's owners — Disney, Warner Bros. Discovery, and Fox — who have pegged the launch price at that range.

But it's also because of basic logic. When the companies that own the sports streamer sell their programming to other pay TV services, they charge a wholesale rate for each channel included in the pay TV bundle — a "carriage fee" in industry terms. And they have to do the same thing here, at the same price.

And when you add up all the prices for the channels that will be in the new streamer, you get to just about $30. $29.35, to be precise, says S&P Global Ratings' Naveen Sarma in a new report. Add in overhead/operating costs — bearing in mind that the new company will have to stand up a new, nationwide streaming service, market to new consumers, and then try to retain them — and the hopes of getting some kind of profit and … that gets you to a retail price of $50, give or take, pretty easily.

(Rich Greenfield, the media analyst at Lightshed Partners, suggests the streamer's costs could be even higher than S&P's estimate.)

Here's how those costs per channel break down:

At this point, you've noted that a huge chunk of that cost comes from Disney, which generates close to $11 per subscriber for ESPN alone, and nearly $3.50 for ABC, plus five more channels.

That also gives you a sense of how much Disney will need to charge for its stand-alone ESPN service, which it says it will launch in the fall of 2025. But let's see how this one does first.

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By: [email protected] (Peter Kafka)
Title: This chart shows why the new sports streamer is going to cost $50
Sourced From: www.businessinsider.com/sports-streamer-disney-warner-fox-espn-how-much-streaming-cost-2024-2
Published Date: Thu, 22 Feb 2024 10:00:01 +0000

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