BofA's Jessica Reif Ehrlich: ESPN DTC launch has advantage alongside broadcast

ESPN+ Streaming App Launch & Strategy - Disney will not disclose subscriber numbers for the new ESPN flagship streaming app [1] - Disney adopts a hybrid approach, aiming to stem linear losses without completely separating from pay TV [2] - The new ESPN app targets the 30 million+ cordless viewers, offering potential bundles, including a free first year with Disney+ and Hulu [3] - The app aims to drive engagement and reduce churn through various features [4] - The platform will evolve with more content, including local and regional offerings, and interactive features like fantasy and betting [5] Competitive Landscape & Pricing - The launch expands Disney's existing offerings significantly without a huge cost, leveraging existing sports rights and scale [8] - Disney believes its reach, through ESPN and ABC, gives it an advantage over competitors like Apple and Amazon in attracting leagues like NFL and NBA [10][11] - Apple TV's US price hike of approximately 30% raises concerns about driving churn as consumers face choices [12] - Scale will matter as consumers choose between services like ESPN for sports and Netflix for general entertainment [13] - Price increases will pressure consumers, highlighting the importance of year-round sports or programming to retain subscribers [14] Advertising & Engagement - The new ESPN app will offer personalized, hyper-targeted advertising opportunities [4][15] - Features like fantasy, betting, merchandise, and multi-screen viewing are expected to drive engagement and potentially add more subscriptions from cordless consumers [7][15]