Posts for 'Venu Sports'

Last weekend Disney blacked out all of its networks on DIRECTV as the carriage agreement between the two companies expired without a new one being reached. These types of disputes are common in the pay-TV industry, and there’s always a lot of jawboning and finger-pointing, making it difficult to understand the exact proposals and counter-proposals.

What seems indisputable is that Disney is pushing for a continuation of its longstanding approach to bundling all of its networks together, perhaps with some additional flexibility for DIRECTV. With ESPN’s high cost, that means the bundle price to DIRECTV is elevated, even as cord-cutting accelerates. It also means DIRECTV would keep paying for a bunch of smaller channels most of its subscribers don’t watch. None of this is especially friendly to viewers.

The irony of course is that even as Disney is pushing for bundling with traditional distributors like DIRECTV, Disney is separately part of the Venu Sports JV which unbundles its (and Fox’s and Warner Bros. Discovery’s) sports networks and packages them into a new streaming offering. Venu’s launch is now up in the air due to Fubo TV winning a preliminary injunction against it.

Stepping back, as we observe, Disney is also pursuing a variety of other moves that also suggest reduced customer focus. The primary example of this is the latest round of Disney+ price increases that this time are coupled with a crackdown on password sharing - an approach completely counter to how Netflix wisely executed its password limit. Even though Disney eked out a profit in its DTC segment in the latest quarter, Colin and I believe these moves will put a lot of pressure on Disney+ subscriber numbers in the coming quarters.

(Outside of the streaming space, Disney also recently and embarrassingly insisted, and then reversed, its position in the case of a woman who died from an allergic reaction to food at Disney World, with Disney initially insisting her husband lost his rights to sue the company because he signed up for Disney+.)

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On today’s podcast, Colin and I discuss last Friday’s decision by U.S. District Court Judge Margaret Garnett, ruling in favor of Fubo by issuing a preliminary injunction preventing the launch of Venu Sports. Venu is a joint venture of Disney, Fox and Warner Bros. Discovery that includes 14 of the companies’ linear TV sports networks, plus on-demand content, for $43 per month. The companies filed an appeal on Monday.

As is evident from the ruling (thanks to the LightShed team for posting), Disney, Fox and Warner Bros. Discovery have created a “gilded cage” for themselves by - up until Venu - only including their sports networks in pay-TV’s multichannel bundle. Disaggregating these networks exclusively for Venu would create a torrent of cord-cutting, as live sports have become a mainstay for those still committed to pay-TV subscriptions. Judge Garnett agreed Venu would cause an immediate negative impact on Fubo (it would for other pay-TV operators too).

It’s not clear to either of us how specifically the JV partners will address the detailed points Judge Garnett articulated in her ruling, nor how persuasive they’ll be in lifting the injunction, especially given that the criteria for a judge to issue an injunction like this is in the first place is the presumption that an eventual trial would arrive at the same conclusion. All of this leaves Venu’s future highly uncertain.

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Memorial Day weekend was a disaster for Hollywood, with approximately $128 million in box office, down 36% from 2023’s total, and the worst in decades. There are some specific reasons, such as the steep underperformance of “Furiosa: A Mad Max Saga.” But as we discuss, any poor box office performance these days must always be viewed in the context of streaming’s myriad choices for viewers. Compounding matters for the box office are streaming’s inexpensive new bundles; on last week’s podcast we noted that Xfinity subscribers in particular can now access 6 top streaming services for just $30 per month.  

Next we return to bundling topic, in light of new research from Antenna showing subscriber loyalty to top streaming services. No surprise, Netflix has the highest loyalty, which in turn begs the question: how does Netflix benefit from participating in discounted bundles? We offer our thoughts.

Also on our radar this week is FreeWheel’s latest research from its Viewer Experience Lab, focusing on factors that diminish the viewer’s ad-supported experience. The testing found that viewers were most bothered by slow or buffering ads (78%), ads that unnaturally interrupt the programming (71%) and “we’ll be right back” slates (33%). The research is important because as CTV advertising becomes an ever more critical revenue stream, delivering top-notch ad experiences will be essential for optimizing monetization.

Last up, we review new research from Horowitz Research which found that of sports viewers, 58% of 18-34 year-olds and 57% of 35-49 year-olds say they’re likely or very likely to subscribe to the new Venu Sports streaming service for $35-$40 per month. While the research validates basic interest in Venu, it still feels early to accurately estimate true demand for Venu. A big looming question for Venu’s value proposition is whether TNT is able to renew its NBA package.

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