The highly anticipated sports streaming project backed by Disney, Fox Corp and Warner Bros. Discovery will reach 5 million subscribers in its first five years, according to a forecast shared Monday by Fox CEO Lachlan Murdoch.
Speaking at a conference hosted by Morgan Stanley, Murdoch cited statistics as a way to answer questions about whether the new venture would threaten the company’s existing pay-TV business.
Murdoch said Fox “built its plans around” its projection of five million subscribers. “So some of the talk about this is around teenagers or 20 million subscribers, we don’t think that’s the case.”
The joint venture is “a very good business for us” given the tens of millions of “never wirers” who want a cheaper way to access sport. He added that the new sports subscribers will be “growing our base.”
The sports project was announced last month, but details are few except for a planned launch date this fall. The biggest missing piece is pricing. Murdoch did not challenge broker Ben Swinburne when he stipulated a range of $40 to $50 a month. The service will aggregate 14 linear networks from member companies, offering the NFL, NBA, Major League Baseball and other sports.
Despite continued strength in viewership, especially for the NFL and college football, sports programs face a complex picture in terms of changing consumer habits. With several million households moving out of pay TV each year, there is an increasing urgency to establish a streaming presence. Disney aims to launch a standalone version of ESPN as a streaming offering in addition to supporting the joint venture.
Murdoch said he did not expect any regulatory hassles as the joint venture approached the market. He also sees no downside risk to the company’s valuable Fox News distribution base.
More is coming …