Disney, Fox Hope New Sports Services Boost Streaming — but Don’t Hurt Cable

 

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Disney and Fox say two new sports-heavy streaming services that debut Thursday aren’t meant to kill traditional TV. They might just do it anyway.

After keeping the bulk of their sports portfolios on cable, both Fox and Disney are setting them free. A broad ESPN streaming service and a new Fox One broadband offering aim to reach the tens of millions of “cord cutters” who don’t subscribe to cable or satellite and who still might want to watch ESPN’s NFL and NBA telecasts or studio shows, or Fox’s MLB games, Fox News programs or selections from the Fox broadcast network.

No matter the companies’ good intentions, there is a growing sense these new services will only encourage those who have yet to sever their connection to traditional TV to at least consider doing so. Fox One, for example, makes big games as well as Fox News programs — some of TV’s most-watched pieces of content — available live as they happen no matter whether the viewer uses a screen that is attached to TV set or a smartphone. ESPN putting everything from “Monday Night Football” to ACC match-ups online in an era when major cable carriers may not want to distribute every one of its many networks.

Sports and news have been “the last true holdouts” to make the jump to streaming, says Mike Proulx, vice president and research director at Forrester Research, and any streaming service that includes such a concentration of them “is ushering in a kind of last nail in the coffin of legacy TV.”

Fox and Disney would beg to differ. Both companies say they have taken pains not to undermine their cable and satellite subscriptions.

“The traditional MVPD ecosystem is still important. This has been very important to our business historically, and it’s going to continue to be very important to our business as we move forward,” says ESPN Chairman Jimmy Pitaro. “We are running parallel paths here.”

Even Fox’s CEO, Lachlan Murdoch, has said he doesn’t want to see his networks’ cable audience migrate to broadband. Like ESPN, Fox is giving traditional subscribers the chance to gain access to new Fox One features and content online, so there’s little need to drop one and get the other. With a potential base of 65 million people who don’t have traditional TV access, there are plenty of new customers to chase, says Pete Distad, CEO of Fox One. Fox One and traditional distributors “are selling the same product, in general,” he notes, adding that Fox isn’t trying to undercut cable companies on price. “We are not doing this at the cost of pay TV.”

Consumers may not have the same loyalty to their pay-TV providers as Disney and Fox. Time and again over the past two decades, one-time couch potatoes have moved quickly to systems that deliver their video favorites in more convenient fashion. In the 2000s and 2010s, they were happy to pick up DVRs that let them zap past the commercial breaks and watch their shows at times of their own choosing. Streaming services have proven even more popular in recent years, with consumers increasingly eager to drop traditional cable in favor of subscription-based venues they can drop and pick up as they see fit — and not be forced to watch a similar overabundance of ads.

Sports is a tricky format to play with in these times of shifting media allegiances. “A big sporting event extends across demographics of all types, and it is one of the last remaining examples of programming that is live and shared across a huge audience at the same time,” says John Harrison, media and entertainment growth leader for EY Americas. Fans will tolerate advertising during games, he says, because the commercials pop up typically during natural breaks in the action. If more sports rights go to companies like Amazon, Netflix and Apple, which have no old ties to broadcast or cable TV, he says, “you can see a total acceleration of cord cutting” in the not-too-distant future.

Meanwhile, people are leaving cable anyway. ESPN is projected to see its traditional pay-TV subscribers fall to 57.9 million in 2026, according to data from Kagan, a market-research firm that is part of S&P Global Intelligence, compared with 65.1 million in 2024. The pay-TV audience for Fox Sports 1 is seen falling to 57.2 million in 2026, compared with 62.8 million in 2024.

The new services may be able to help keep cable afloat, Harrison suggests, because they both will let pay-TV customers have access to much of their new technology. Such a decision may “lengthen the runway” for pay-TV crowds, he says, but its effectiveness in doing so probably won’t be known for a year or two.

There is also a chance ESPN and Fox may boost cable. A handful of recent deals gives companies like Charter Communications, one of the biggest traditional distributors, the chance to sell streaming services like Disney+. “We are actually going to be distributing Fox One potentially through” cable companies over time, notes Fox’s Distad.

Even so, moving more sports to streaming is one of the few ways media companies believe they’ll be able to reclaim the large audiences they once collected via their linear networks. Advertisers want those crowds to assemble once again. Unless cable companies stop shedding subscribers, companies like Disney and Fox have little choice but to move sporting events to where the most eyeballs are.

“I think we’ve reached the point, really, where cord-cutting trends and the outlook for the future pay TV landscape, has forced the issue,” says Harrison. Media companies have to create “a committed path to monetization of all their content,” and they can’t leave sports out of the picture.