DECEMBER 5, 2024

Welcome back to Buffering, where I’m still processing the fact that it is already December — and dealing with the increasingly dire state of the world by mainlining Hallmark Christmas movies. Like almost everything in cable these days, same-day ratings for the channel’s holiday offerings have been down, in some cases dramatically, versus last year. But this Saturday’s highly-promoted Holiday Touchdown: A Chiefs Love Story was a big exception, drawing just shy of 3 million viewers and beating everything on TV in primetime Saturday other than ABC’s marquee college football game. It was a very well-done, satisfying film (and not just grading on a Hallmark curve), and if I were running CBS, I’d be figuring out a deal to get a run of the movie the Sunday before Christmas. I think a ton of football-watching viewers who don’t have Hallmark or would never think to check out the channel would find (and love) Touchdown. Hallmark movies do stream on-demand via Peacock, but only for three days after their TV premiere. This is the kind of movie that demands a broader audience.

As for this week’s newsletter, our focus is on Disney’s latest attempt to get its streaming subscribers to trade up to the more expensive Disney Bundle. Earlier this year, it did this by integrating Hulu content into the Disney+ app. Now the company is trying for a holiday touchdown of its own by giving all Disney+ customers access to select ESPN programming, including a few NBA games. You didn’t think Bob Iger was going to let Netflix, Amazon, and Peacock have all the live sports fun, did you?

—Joe Adalian, West Coast editor, Vulture

ADVERTISER CONTENT

Photo: Disney+

A few months prior to the launch of Disney+ in November 2019, Bob Iger offered Wall Street analysts a pretty simple rationale for why he was keeping the new streamer’s mandate tightly focused on family-friendly entertainment and big Mouse House brands such as Marvel and Star Wars. With Hulu and ESPN+ already well-established, he explained, “Rather than creating one gigantic fat bundle of sports, general entertainment programming, and family programming, we thought we’d serve the consumer better by segregating all three.”

Five years later, Disney still has three separate streaming apps, but the days of strict separation of genres? As of this week, those days are over.

On Wednesday, Disney+ debuted a new ESPN tile which allows anyone who pays for ESPN+ as part of the Disney Bundle to stream everything on that service via the Disney+ app. In that respect, it’s pretty much identical to the Hulu on Disney+ initiative the company debuted earlier this year, though as my colleague Savannah Salazar will outline a bit further down, there are some differences. What this rollout also means is that, for the first time ever, anyone who subscribes to the so-called Disney Trio bundle can get the Magic Kingdom’s full streaming portfolio via a single app experience — no flipping required. That “one gigantic fat bundle” Iger low-key dissed a half-decade ago is now being touted by Disney as “a seamlessly integrated viewing experience … that only The Walt Disney Company can deliver.”

This might seem like a pretty big flip-flop, but A) times change, and B) compared to Netflix’s reversal on advertising and password sharing, Iger’s evolution barely registers on the corporate hypocrisy meter. Plus, as noted, Disney, at least for now, does let consumers choose more narrowly focused streaming apps if that’s what they want.

It’s no great mystery why Iger and Disney opted to change course, nor is it anywhere close to a surprise. For one thing, back in 2019, Disney didn’t have full financial control of Hulu yet (Comcast was still a partial owner), something which would have made a blurring of the lines between platforms much more difficult. I’m also not convinced Disney had the engineering know-how back then to handle a supersized app with live sports and Hulu content and the vast Disney+ library, or that it would have been wise to force existing Hulu customers to pay a lot more for Disney or ESPN programming they didn’t want. Iger’s go-slow approach was the right call at the time.

Instead of consolidation, Iger introduced the Disney Bundle, which let folks pay one bill for two or three different services even as they still watched via separate apps. It was a good way to reduce subscriber churn and encourage Disney superfans to maximize their TV experience. But the one flaw of that approach has always been that, with so many viewing options, if a heavy Hulu user forgets to check out Disney+ for a few days (or vice versa), they’ll begin to think they’re not getting enough value out of their subscription and be more likely to downgrade or cancel altogether. That’s why Netflix offers so much programming: Even if you’re not digging their last couple of original series, they’re betting you’ll stick around for one of their movies, stand-up specials, or, more recently, their overhyped sporting events. That’s a tougher sell when programming is diffused across multiple apps. So even if the Disney Bundle was a good stopgap measure, having Hulu and ESPN programming integrated into the same app where Disney+ programming lived always made more sense.

And so, from almost the moment D+ launched, it became pretty clear that Disney brass would eventually change course and find a way to offer the streaming equivalent of the “E Ticket” that the company offered at its theme parks up until the mid-1990s. Synergy is built into the very DNA of The Walt Disney Company; there’s no way the company that puts hotels and shopping centers in the middle of its theme parks wasn’t eventually going to figure out a way to put its entire streaming offering under one carefully imagineered roof. That’s why, when Disney started to experiment with streaming some ESPN+ programming on Hulu (not Disney+) back in 2021, I wrote that I “wouldn’t at all be surprised if Disney eventually lets consumers stream all three platforms via one app.” Or why, even earlier, less than a year after Disney+ debuted, I was already convinced of the need for a single-app experience:

Disney understandably wants to keep Disney+ very tightly focused on family-friendly programming, but why shouldn’t reruns of Black-ish or The Conners live on Disney+ in addition to Hulu?… And while I get the importance of making sure parents know that Disney+ is totally kid-safe, it seems counterproductive to force consumers who pay for the Disney bundle to switch between three apps to find content owned by the same company….It seems illogical to draw digital borders between the various lands within the Disney streaming kingdom.

To be clear, this doesn’t make me some sort of streaming Nostradamus. The consolidation of Disney streaming apps is something numerous analysts and journalists have been talking about for years. Honestly, even folks I talked to at Disney always said this was on the drawing board. The only debate, really, had been how quickly things would evolve, and whether Disney would also just kill Hulu outright and do what Iger said he didn’t want to do in 2019, i.e., give audiences no other option but to pay for a single, supersized app. At least for now, Iger seems to have settled on giving consumers choice.

Now, of course, the question is whether in, say, another five years, Disney will still think it makes financial sense to pay the overhead needed to maintain standalone Hulu and ESPN apps and infrastructure, or whether there are even enough stand-alone Hulu and ESPN+ customers left to justify their existence. As my colleague Savannah notes below, the coming launch of ESPN’s new flagship app next year (and its likely huge price tag) suggests Disney is going to at least keep a separate sports-only experience viable for a while. But as for Hulu … I’m not so sure. People have been predicting the app’s demise since the moment Disney decided it was launching Disney+, so I’ve learned to never count it out.

That said, one of the most interesting parts of this week’s rollout of ESPN on Disney+ was the announcement that Disney would be giving all of its subscribers — even those who pay only for Disney+ — the ability to watch a notable amount of programming from Hulu and ESPN at no extra charge. FX’s Emmy-winning Shogun and ESPN staples such as Pardon the Interruption, along with thousands of live sporting events, will be available to all Disney+ customers, regardless of bundle status. As Disney+ president Alisia Bowen told Savannah and the other reporters who attended a press event earlier this week, this strategy will “allow those standalone Disney+ subscribers to really explore and experience a sampling of our great sports and general entertainment content” and will “make it easier to see the full value of our bundle.” And if folks like what they see, or want to see more of it? “They'll have easy ways to upgrade their subscription to unlock full access to the complete content lineup,” Bowen said.

What Disney is doing with this sampling approach is not unlike what Amazon’s Prime Video has been doing for years with its channels store. Prime customers are regularly given access to full seasons of a show on, say, BritBox or MGM+, and then, when it’s time to watch season two, they’re prompted to add on a subscription to that service. While some folks find this annoying and gimmicky, it clearly works, since so many streaming platforms continue to give Prime the ability to preview their wares. Given upgrading from basic Disney+ to a duo bundle with Hulu costs just $1 more per month, this free programming could serve as a powerful enticement to upgrade.

In any case, regardless of whether Hulu continues as its own independent app, it’s pretty clear that Disney is going to be relentless in trying to get as many of its current Disney+ or Hulu standalone subscribers to upgrade to a bundle with both. What happened this week should make that goal a lot more achievable.

By Savannah Salazar

Photo: Disney+

Most sporting events usually involve two teams, but over on Disney+, the streamer is introducing a third to the mix: ESPN+.

Following in the footsteps of the successful integration Hulu into Disney+ launch, the sports streaming service is finally available as part of the company’s “one-app experience” starting this week. It’s a change that ESPN exec Brian Marshall says he hopes will make Disney+ “stickier” — a.k.a. get you to stay glued to the screen longer (or at least less likely to cancel), whether you’re a sports mega-fan or just a casual one. As Disney+ president Alisa Bowen puts it: “Network television has a long and successful history of being able to launch new shows off the back of major sporting events. That’s certainly an opportunity for us. But above all else, this is about repositioning Disney+ as something with content for everyone, content for the whole family, and the ability to really build that co-viewing off the back of sports and general entertainment is a really big part of that evolution.”

So, with Disney+’s new “multi-genre experience” poised to change your streaming habits, you may have questions. We’ll break down what we’ve learned about what you can expect from ESPN+ and Disney+ going forward.

Pretty much. ESPN+’s homecoming to the Disney streamer should be a bit easier to navigate if you’ve had experience with Hulu on Disney+. It’s essentially the same process: Consumers who subscribe to both (or all three) of the streamers can access all of ESPN+ and Disney+’s offerings under one platform, Disney+. But even if you don’t have ESPN+ yet, starting this week, Disney+ is giving you an opportunity to “sample” a notable amount of its programming anyway. So, regardless of whether you have ESPN+ or not, Disney+ subscribers will be able to tune into The Simpsons Funday Football game this Monday, December 9th. (The streaming service will be doing the same with a handful of Hulu programs like Shogun and Reservation Dogs as well, for standalone Disney+ subscribers.)

Bowen said this “sample content” will serve as a way to see the “full value of our bundle” for those on the fence about ESPN+ or Hulu. The service will regularly switch out the offerings to make sure they’re offering something that “is of the moment.” “We’re intending to deliver a select number of live events every month to all Disney Plus subscribers. These will be events from a range of leagues including the NBA, the WNBA NHL, even tennis.” Basically, whatever it takes to get you to pay for the full bundle.

We were shown the beta experience and it’s relatively similar to Hulu on Disney+, but with a few upgrades. You must subscribe to ESPN+ to get its full library of offerings first and foremost. You can upgrade within the app easily, and conveniently, but if you already have ESPN+, you should see the tile available right next to Hulu. There you’ll have access to live games, and there’s even specific hubs for different leagues and programming.

Yes. While Disney seems quite pleased with the success of Hulu on Disney+ and the introduction of ESPN on Disney+, Bowen touted “40% of the entitled subscribers are engaging with Hulu content on Disney+ every month,” the company is still keeping their current ESPN+ standalone app. There even is a “flagship” ESPN direct-to-consumer app, which Bob Iger announced is coming in fall 2025 — ESPN+ SVP John Lasker revealed to us it will launch in August. The “more robust” Flagship app will also be a part of the ESPN hub once it launches as well, but we’ll talk about that more next fall.

As of now, there’s been no price hike associated with the introduction of ESPN on Disney+. (The last uptick in price was in August.) And Disney hasn’t debuted a slimmer bundle to own just ESPN+ and Disney+ like they have with Hulu, a.k.a. the Duo Bundle in Basic and Premium. To get the sports streamer and Disney+, you’ll need to opt for the trio bundle that includes Hulu for either $16.99 a month (the basic ad-supported plan) or $26.99 (the ad-free premium tier). ESPN+ on its own is $11.99, so the basic bundle comes with two more services for 5 bucks more.

As Joe writes above, maybe one day — but not anytime soon.The standalone app for ESPN+ is staying, and with a significant redesign to boot, so clearly the company still has plans for its standalone apps as well as its “one-app experience.” Disney is all about giving you options at the moment. The company had a rough year in 2023 with a loss of $387 million in its third quarter. Back then, Bob Iger claimed that their streamer would be profitable by fall 2024. A few weeks ago, during the company’s most recent earnings report, Iger revealed a 4.4 million sub increase over Q3, and “projected roughly $1 billion in operating profit from its Disney+ and Hulu entertainment streaming businesses for fiscal 2025.” Advertising has been a boon for them, and most of its current bundle packaging and pricing makes its ad-supported plans the more enticing options for most consumers. Bowen herself said Hulu and ESPN on Disney+ is an “optimistic” way to “drive further adoption of the bundle.” All hail the return of cable!

ADVERTISER CONTENT