Does Disney’s Streaming Venture Spell the End for Pay TV Bundles?

In the end, bloated, costly pay-TV bundles, which consumers have despised for years, could be killed off by a mouse. Disney's announcement this week that it will launch two Internet-based streaming-TV services -- one for sports and one for family fare -- is a declaration of independence from cable and satellite companies that would have subscribers pay for hundreds of channels they may never watch.

It's the most significant advance for cord-cutting since HBO broke free with its own streaming service a couple of years ago. That service, HBO Now, has grown to more than 2 million subscribers.

"People are married to specific brands," said David Miller, an analyst with Loop Capital in Los Angeles. And Disney has some of the biggest, most-beloved brands in the media business, including its namesake movies and TV shows, ESPN, ABC, Pixar, Marvel Studios and Lucasfilm.

"It all depends on how the streaming services get priced," Miller told me. "Is it $4.99 a month? $9.99? $16.99?"

My guess is that the family-oriented Disney stream, set to debut in 2019, will have to be priced competitively with the likes of HBO and Showtime, meaning somewhere near $12 a month.

The ESPN stream, on the other hand, will have more latitude. What I've heard repeatedly from sports fans is that they want to cut the pay-TV cord but can't because they'd lose access to their favorite sports programming.

A robust ESPN streaming service could demand as much as $25 monthly, I'm told. For sports fans, this would still represent a savings from the average $100 cable bundle -- adios, Hallmark Channel; sayonara, Nickelodeon -- even with the added cost of a broadband Internet connection.

To be sure, Disney offering sports and kids' shows via streaming apps won't kill off the cable industry.

"We're talking baby steps," said Brian Wieser, senior media analyst with Pivotal...

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