Washington DC — Sports streaming service Venu, priced at $42.99 a month, faces a major marketing challenge: finding its audience.
Venu, jointly owned by Disney, Fox and Warner Bros. Discovery, announced Thursday that it will launch this fall. While it’s more expensive than services like NetflixMax and Peacock, it costs less than YouTube TV at $73 a month or a standard cable package, but those include a wider variety of entertainment, not just sports.
Venu will provide access to a selection of networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, Fox, FS1, FS2, BTN, TNT, TBS, and truTV. Subscribers will also receive ESPN+. The plan is to launch in time for football season. However, it does not include CBS and NBC, two networks that have rights to many sports, including college football and NFL games.
Venu’s ideal user is someone willing to pay a significant monthly subscription for a narrow segment of media: live sports, but not all live sports. The service is marketing itself as a product for so-called “cord nevers,” a group of younger consumers who have avoided paying for cable because it’s too expensive but crave access to ESPN and other live sports.
It is unclear whether this user base will materialize.
Venu faces two major hurdles. First, the total addressable market of users willing to 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 upfront, 54% of people would rather watch creators break down a major live event than watch the event itself.
On the other hand, young NFL fans will have to buy Peacock and Paramount+, streaming services tied to NBC and CBS, to get a full slate of NFL games. They could also get a digital antenna to go with the Venu, but antenna adoption among young viewers may be unlikely.
Other major sporting events, such as the ongoing Olympics, will not be available on Venu, as Olympic broadcaster Comcast NBCUniversal is not part of the service.
Existing competition
The second problem is potentially bigger: a product like Venu already exists and could be cheaper.
For $60 a month, Echostar’s Sling TV offers the most popular networks included with Venu (ESPN, TNT, TBS, Fox, and ABC), but also includes NBC. It also includes CNN, Fox News, MSNBC, Bravo, USA, HLN, Discovery NFL Network, and a host of other networks (46 in total, compared to 14 for Venu). It also offers an introductory offer where consumers can pay just $30 for the first month.
At the end of March, Sling TV had 1.92 million subscribers and is not growing. It lost 135,000 customers in the first quarter, a smaller loss than the 234,000 subscribers it lost in the first quarter a year ago.
At the end of 2021, Sling TV had 2.5 million customers, down from 2.7 million subscribers in 2019.
The company attributed the decline in the last quarter to the existence of other streaming services.
“We continue to face increasingly fierce competition, including competition from other OTT and live-linear video-on-demand subscription service providers, many of which are providers of our content and offer seasonal football and other sports programming directly to subscribers on an à la carte basis,” Echostar said in a filing.
In short, Sling TV, a more comprehensive offering than Venu at about $17 more per month, has been losing subscribers for five years and has never reached its peak of 2.7 million.
This presents a significant marketing challenge for Venu, as it will have to convince consumers that the service is worth subscribing to based on the strength of its brand and technology.
Alternatively, it hopes its $43-a-month offer will last long enough to make up the $17 difference. The typical model for live network packages is that they start with an introductory offer only to increase prices. Venu hinted at this in its press release, telling consumers that they could lock in the $43-a-month price for 12 months from the time of signing up, suggesting that a price increase could be on the way.
Venu plans to add more sports to the service in the future, but that will likely mean a price increase, making the value proposition even harder to sell to cable TV fans.
To further challenge Venu, Disney is already planning a flagship ESPN streaming service for the fall of 2025, which will include ESPN at a lower price point than Venu.
Disney, Warner Bros. Discovery and Fox will argue that they are trying to get maximum reach here, much like Apple’s iPad Mini did by slotting into the tech company’s existing product lineup between its phones and larger tablets. Maybe there’s an audience for Venu, and if there is, companies want to serve it. Fox CEO Lachlan Murdoch has already predicted that the service could gain 5 million subscribers in the next five years.
But even 5 million seems like a lofty goal, given Sling TV’s troubles. Getting to that number will require a lot of marketing money.
And this effort could prove so costly that it defeats the purpose.
