Call Don Draper, Venu Sports could have a marketing problem
The Disney, Fox And Warner Bros. Discovery The jointly operated streaming service announced Thursday that it would launch in the autumn for $42.99 per thirty days. That's way more expensive than NetflixMax, Peacock, or one other major streaming subscription service. It's less expensive than YouTube TV at $73 a month or an ordinary cable package – but those deals include a wide selection of entertainment content beyond sports.
Venu offers consumers access to a bundle of networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, Fox, FS1, FS2, BTN, TNT, TBS and truTV. Subscribers also get ESPN+. It plans to launch in time for football season. It doesn’t include CBS and NBC, two networks that own the rights to many sports, including college football and NFL games.
Venu's theoretical user is someone willing to pay a hefty monthly subscription for a narrow segment of media — live sports, but not all live sports. The service markets itself as a product for the so-called “cord nevers” — a bunch of younger consumers who didn't need to buy cable TV since it's too expensive, but who crave access to ESPN and other live sports.
It is totally unclear whether this user base will come into being.
There are two major obstacles to Venu's success. First, the whole addressable market of users willing to pay $43 a month for some sports but unwilling to pay for cable TV might not be that enormous. Many non-cable subscribers are content to observe highlights on YouTube and get commentary from their favorite influencers. According to a survey by Kantar cited by YouTube in its 2024 forecast, 54% of individuals would reasonably It's higher to observe producers analyze a significant live event than to really watch it.
At the opposite end of the spectrum, NFL-mad young people might want to buy Peacock and Paramount+ — the streaming services owned by NBC and CBS — to get a full lineup of NFL games. They could also get a digital antenna to pair with Venu, but antenna adoption amongst younger viewers is likely to be a bit of inconsistent.
Other major sporting events – corresponding to the continuing Olympic Games – will simply not be available on Venu since the Olympic broadcaster Comcast's NBCUniversal is just not a part of the service.
An existing player
The second problem could also be even greater: A product like Venu already exists – and it could already be a greater deal than Venu.
For $60 a month, Sling TV by Echostar offers the favored networks that include Venu – ESPN, TNT, TBS, Fox and ABC – but additionally NBC. Additionally, CNN, Fox News, MSNBC, Bravo, USA, HLN, Discovery NFL Network and a complete host of other networks are included – 46 in total, in comparison with Venus' 14. There's also an introductory offer where consumers pay just $30 for the primary month.
At the top of March, Sling TV had 1.92 million subscribers and the number is just not growing. In the primary quarter, the corporate lost 135,000 customers, but that was lower than the 234,000 subscribers it lost in the primary quarter a yr ago.
At the top of 2021, Sling TV had 2.5 million customers, down from the two.7 million subscribers it reached in 2019.
The company blamed the existence of other streaming services for its decline last quarter.
“We continue to experience increasing competition, including competition from other providers of video-on-demand subscriptions and live linear OTT services, many of which provide our content and offer football and other seasonal sports programming directly to their subscribers à la carte,” Echostar said. said in a.
In summary, Sling TV – a more comprehensive offering than Venu for about $17 more per thirty days – has been losing subscribers for five years and never had greater than 2.7 million subscribers at its peak.
This presents Venu with quite a marketing challenge: the corporate must persuade consumers that a subscription is worth it due to its strong brand and technology.
Or the corporate is hoping its $43-per-month offer will last long enough to capitalize on the $17 difference. The typical pattern with live network packages is that they begin with an introductory offer after which increase prices. Venu hinted at this in its press release, telling consumers they might lock within the $43-per-month price for 12 months from the time they join – suggesting a price increase might be coming.
Venu plans so as to add more sports to its lineup over time, but that can likely lead to a price increase and make the wireless price-performance ratio even harder to sell.
To undercut Venu even further, Disney is planning an ESPN flagship streaming service as early as fall 2025 that can include ESPN at a cheaper price than Venu.
Disney, Warner Bros. Discovery and Fox will argue that that is about maximum reach – very similar to the Apple iPad mini did, slotting into the tech company's existing lineup between its phones and bigger tablets.. Maybe there’s an audience for Venu, and in that case, corporations need to serve it. Fox CEO Lachlan Murdoch has already predicted The service can gain 5 million subscribers in the following five years.
But even $5 million seems ambitious given Sling TV's difficulties. To achieve that, a whole lot of money may have to be invested in marketing.
And this effort could be so costly that it defeats the aim.
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