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Disney offers something that streaming competitors ‘are not offering,’ analyst explains

As streamers continue to battle for sports media rights, The Walt Disney Company (DIS) already has something others are searching for, according to one analyst: a bundle.

“This is something that Disney can offer that its competitors are not offering, which is a bundle,” Rosenblatt Securities Senior Research Analyst Barton Crockett said on Yahoo Finance Live (video above). “Multiple services and price points and ways to hook you in. One of the lessons of the history of television is bundling.”

Disney currently offers bundle options of Disney+, Hulu, and ESPN+ ranging from $13.99 to $19.99 per month, and also has a $69.99/month option that includes Hulu Live TV.

Crockett highlighted this strategic advantage for Disney and how it could be crucial moving forward as customers begin to consolidate their streaming bills, just like how cable subscribers once bundled their TV packages.

Attendees visit the Disney+ streaming service booth at the D23 Expo on August 23, 2019 at the Anaheim Convention Center in Anaheim, California. (Photo by Robyn Beck/AFP)
Attendees visit the Disney+ streaming service booth at the D23 Expo on August 23, 2019 at the Anaheim Convention Center in Anaheim, California. (Photo by Robyn Beck/AFP) (ROBYN BECK via Getty Images)

“In cable, they start off on your TV,” Crockett explained. “They offer you broadband and television service and now mobile phone service. These extra hooks are a great way to kind of lock people in. People like to reduce the number of bills they like to reduce complexity. They like to work with someone they’re comfortable with."

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Some reports have pinned Disney’s ESPN+ as a potential tailwind for the overall bundle package against those competitors since the new $9.99 starting price is relatively close to the $14.99 entry level price for the Disney+, Hulu, and ESPN+ bundle.

The bundle is unique in the streaming space in that ESPN has more sports content than any of its major competitors while Hulu offers both live TV and a content library.

On Friday, ESPN+ announced a 43% price increase in a subscription, pushing the monthly rate from $6.99 to $9.99. The company stated that its recent content additions including NHL streaming rights, additional PGA Tour coverage, and more bring additional value to customers.

A look at the bundle options for Hulu, Disney+, and ESPN+. (Photo: Hulu)
A look at the bundle options for Hulu, Disney+, and ESPN+. (Photo: Hulu)

In a statement to Yahoo Finance, the company also cited the increase as “part of an established plan to ensure ESPN+ is a profitable and strong long-term business.”

ESPN+'s pricing increases have carried over to the larger streaming picture as well, where Disney is battling the likes of Netflix (NFLX), Warner Brother Discovery (WBD), and more recently, Apple (AAPL) and Amazon (AMZN).

Netflix spent $200 million on new movie Gray Man while Apple recently spent $2.5 billion on MLS rights and is reported to be battling Amazon and others for the NFL Sunday Ticket and UEFA streaming rights.

Disney's further push into sports, however, has come at a cost. In the company's most recent earnings report on May 11, Disney cited additional sports media rights as a contributing factor for the nearly $1 billion operating loss in its direct-to-consumer platform.

Still, Crockett is bullish on the long-term outlook for the company: “Disney has the scale to do that and others can’t do what Disney is.”

Josh is a producer for Yahoo Finance.

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