fiscal second-quarter earnings conference call Wednesday afternoon, an investor asked CEO Bob Chapek what was holding the company back from expanding it as an all-in-one service.
Chapek said that Disney is trying to preserve the “huge” cash flow generated by its linear networks before jumping into a direct to consumer (DTC) decision like that.“At the same time, we’re very conscious of our ability to go more aggressively into the [direct to consumer] area of ESPN,” said Chapek. “And so, what we’re doing is sort of putting one foot on the dock if you will, and one foot on the boat right now.
But we know that at some point when it’s going to be good for our shareholders, we’ll be able to fully go into an ESPN DTC offering the way that you described, and we fully believe that there is a business model there for us that’s going to enable us to regain growth on ESPN+, in a full DTC expression.
But at that point, obviously, that will have ramifications on immediate cash flow that we get from our legacy linear networks.”Currently, ESPN+ does exist as a limited standalone service, however for those who want to see games that air on the broadcast ESPN networks, they’ll need a cable package.
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