Disney Could Use YouTube TV Blackout to Increase Streaming Revenue

Disney’s popular content, like ESPN and ABC, has been missing from YouTube TV since the end of October due to contract negotiations between Disney and YouTube’s parent company, Alphabet. According to Citi media and entertainment senior analyst Jason Bazinet, Disney’s strategy seems to be pushing viewers towards their streaming service, ESPN Plus.
Bazinet explains that while the impact may seem small at first, ESPN Unlimited could become a significant driver for Disney in the future. With the rise of cord-cutting, especially among non-sports households, Disney stands to benefit from the shift towards direct-to-consumer streaming services. Bazinet estimates that this transition could potentially lead to a $10 increase in Disney’s share price.
Interestingly, despite the potential for growth, many investors seem to be overlooking this opportunity. Bazinet suggests that Disney may be downplaying the significance of the move to avoid upsetting traditional TV affiliates. By leveraging the dispute with YouTube TV, Disney may be trying to entice customers to switch over to ESPN Plus instead.
Looking ahead, Bazinet believes that Disney’s shift towards direct-to-consumer streaming could be a successful move. This strategy may disrupt the traditional pay TV model, benefiting consumers and Disney, while posing challenges for traditional TV broadcasters. Overall, the shift towards streaming services like ESPN Plus seems to be a promising bet for Disney’s future.