Actor Jon Hamm plays Don Draper on Mad Men.
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Contact Don Draper, Venue Sports may have a marketing problem.
the Disney, fox And Warner Bros. Discovery The jointly owned streaming service announced Thursday that it will launch this fall at $42.99 a month. That’s significantly more expensive than NetflixOr Max or Peacock or any other major streaming service. It’s a lot less than YouTube TV’s $73-a-month service or a standard cable package — but these deals include a wide range of entertainment content beyond sports.
Venu will give consumers access to a range of networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, Fox, FS1, FS2, BTN, TNT, TBS, and truTV. Subscribers will also get ESPN+. The service is set to launch in time for football season. The service does not include CBS and NBC, which have rights to broadcast a number of sports, including college football and the NFL.
The theoretical user of Vino is someone willing to pay a high monthly subscription for a narrow slice of media—live sports, but not all live sports. The service markets itself as a product for so-called “cable-non-gamers”—a group of younger consumers who don’t want to pay for cable because it’s too expensive but crave access to ESPN and other live sports.
It is not entirely clear whether this user base will materialize.
There are two major obstacles to Vino’s success. First, the total target market of users who would pay $43 a month for some sports but not cable may not be that large. Many non-cable subscribers are content to watch YouTube highlights and their favorite influencers for commentary. According to a Kantar survey cited by YouTube in its 2024 pitch, 54% of people would rather watch creators analyze a major live event than actually watch the event.
On the other end of the spectrum, young NFL fans will have to buy Peacock and Paramount+ — streaming services affiliated with NBC and CBS — to get a full slate of NFL games. They may also get a digital antenna to pair with the Venu, but antenna adoption among younger viewers could be a bit of a stretch.
Other major sporting events – such as the ongoing Olympic Games – will not be available on Venu, as the Olympic broadcaster Comcast NBCUniversal is not part of the Service.
Player present
The second problem is perhaps even bigger: A product like Vino already exists—and it may actually be a better deal than Vino.
For $60 a month, Echostar’s Sling TV service offers the popular networks that come with the Venu — ESPN, TNT, TBS, Fox, and ABC — but also includes NBC. Plus, it also comes with CNN, Fox News, MSNBC, Bravo, USA, HLN, Discovery NFL Network, and a bunch of others — 46 in total, versus 14 on the Venu. Plus, it comes with an introductory offer where consumers can pay just $30 for the first month.
For those who just want ESPN, Sling TV also offers a $40 per month package that doesn't include the broadcast networks but does come with TBS, TNT, CNN, and over 20 other networks.
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By the end of March, Sling TV had 1.92 million subscribers, and the channel had not seen any growth. The channel lost 135,000 subscribers in the first quarter, which was smaller than the 234,000 subscribers it lost in the first quarter of last year.
At the end of 2021, Sling TV had 2.5 million subscribers, down from 2.7 million in 2019.
The company blamed its decline in the last quarter on the presence of other streaming services.
“We continue to face increased competition, including from video-on-demand and online streaming providers, many of whom are our own content providers and deliver football and other seasonal sports programming directly to subscribers on an a la carte basis,” EchoStar said in a filing.
In short, Sling TV — which offers a more robust offering than Venu for about $17 more per month — has been losing subscribers for five years and never gained more than 2.7 million subscribers at its peak.
This poses a major marketing challenge for Venu, which will need to convince consumers that subscribing is worth the power of the brand and technology.
Or maybe the company is hoping its $43-per-month offer will last long enough for it to cash in on the $17 difference. The usual pattern for live network packages is to start with an introductory offer and then raise prices. Venu hinted at this in its press release, telling consumers they can lock in the $43-per-month price for 12 months from the time they sign up — suggesting that price increases are likely.
Venu wants to add more sports to the service over time, but that will likely increase the price, making the value proposition more difficult for those who don't use wireless.
In an attempt to further reduce the price of Vino, Disney is already planning to launch a major ESPN-affiliated streaming service in the fall of 2025, which will include ESPN at a lower price than Vino.
Disney, Warner Bros., Discovery and Fox will claim they are seeking maximum coverage here – much as Apple’s iPad Mini did when it slotted itself into the tech company’s existing product lineup between its phones and larger tablets. Vino may have an audience, and if so, the companies want to serve it. Fox CEO Lachlan Murdoch has already predicted that the service could gain five million subscribers in the next five years.
But even five million people may seem ambitious given the difficulties Sling TV faces, and reaching that number will require spending a lot of money on marketing.
This effort may be so costly that it defeats its purpose.
Disclosure: NBCUniversal, the parent company of CNBC, owns NBC Sports and NBC Olympics. NBC Olympics holds the U.S. broadcast rights to all summer and winter games through 2032. NBC Sports broadcasts NFL games.
