The Disney Trio of streaming services is three, three, Three times the entertainment for Disney, even if it’s not exactly triple the revenue for Disney.
Disney’s Trio—Disney+, ESPN+, and Hulu—costs $12.99 a month for the “Basic” plan (with ads) or $19.99 for the “Premium” plan without ads. The combination provides clear value for consumers: Trio Basic is a 49% savings over subscribing to each service individually; without ads, that’s a 44% savings. (Disney is happy to give you a larger reduction on the subscription price in exchange for advertising revenue; details on the options are Here.)
But where the package really pays off for Disney is in a subscriber’s loyalty. The Disney Bundle, a term generally reserved for the Trio (there’s also an ad-supported Hulu and Disney+ Duo for $9.99 that falls under the “Disney Bundle” banner), has the lowest churn (the amount of subscribers that cancel a service ) across the entire streaming industry at just 2 percent, according to new Antenna data compiled by analysts at technology, media and telecommunications research firm MoffettNathanson.
That’s better than Netflix’s 3.3%; the average abandonment rate in the sector remained stable at around 6-7%. And 2 percent is double the standalone Disney+ rate (4 percent). Hulu’s self-abandonment rate is 5 percent; ESPN+’s self-abandonment rate is pretty bad, just a little north of 7 percent.
Sixty million, or a hair more than half of Disney’s reported 119.8 million total domestic subscribers, come from the Trio, according to MoffettNathanson. Unsurprisingly, ESPN+ is the one that benefits disproportionately from the package: The service has just 5.3 million self-subscribers, but gets another 20 million thanks to the Trio.
For Michael Nathanson and his team, there is a clear conclusion from the data: “The best path forward is a Disney bundle that incorporates all Hulu, Disney+ and ESPN+ content into one app,” reads the note from Tuesday, obtained by IndieWire. . They called it “a much better opportunity here than it sounds.”
While a Hulu tile is already (read: Finally) coming to Disney+, analysts believe that “ESPN’s sports content should also be integrated.” Why not? The numbers show that ESPN+ is available to too many users, but the three-in-one approach is a keeper. Then really put them in one.
The future of ESPN, the brand, has been debated for some years now. The linear network is a money-printing factory, but the cord-cutting and struggling advertising market has your single most expensive cable channel in the making. ESPN’s requests for full streaming as a standalone SVOD/AVOD hybrid service were met with calls of “Are you crazy?” Crazy as a fox (not a Foxwhich has kept its sports business away since Disney’s 2019 acquisition — and has mostly kept away from streaming) if part of a larger Disney streamer, Nathanson told IndieWire.
While it seems inevitable that ESPN will go completely over the top, you shouldn’t slaughter a cash cow until it’s nearing the end of its natural life. And forget about content: These days, cash is king. While Hulu has been seen as profitable for some time, Disney+ is still looking to 2025 to hopefully hit that benchmark.
How bad is the current media landscape? On the same note as all this optimism, Moffett-Nathanson cut his previous DIS price target (but retained his “outperform” valuation) by $7 to $120. Disney shares closed Tuesday just south of $90 a share.
