Disney’s OTT Launches ‘Important Step’ in Pay-TV Industry’s ‘Evolution,’ S&P Says

Disney’s plans to launch two direct-to-consumer (DTC) video services in the next two years under the ESPN and Disney brands (see 1709080027 and 1709080030) “will further exacerbate the growing divide between media companies that have strong intellectual property and a deep library of content and those that don't,” S&P Global Ratings said in a Friday report. “Disney's announcement is an important step in the continued evolution of the U.S. television industry," S&P said. “Disney has been a staunch defender of the pay TV video bundle.” But with launch of an “enhanced” ESPN-branded livestreaming service, “the company appears to be hedging against an acceleration in pay TV subscriber declines and positioning itself to upgrade the service to a stand-alone DTC service in the future,” it said. “Since sports is the glue that holds the pay TV bundle together, any significant change in Disney's sports strategy could affect the video bundle's long-term prospects.”