The Disney Bundle — Hulu, Disney+, and ESPN+ — has the lowest churn rate in the industry

Disney loves the way you collect

The Disney Trio of streaming services is three, three, Three times the entertainment for Disney, even if it’s not exactly triple the revenue for Disney.

Disney’s Trio—Disney+, ESPN+, and Hulu—costs $12.99 a month for the “Basic” plan (with ads) or $19.99 for the “Premium” plan without ads. The combination provides clear value for consumers: Trio Basic is a 49% savings over subscribing to each service individually; without ads, that’s a 44% savings. (Disney is happy to give you a larger reduction on the subscription price in exchange for advertising revenue; details on the options are Here.)

But where the package really pays off for Disney is in a subscriber’s loyalty. The Disney Bundle, a term generally reserved for the Trio (there’s also an ad-supported Hulu and Disney+ Duo for $9.99 that falls under the “Disney Bundle” banner), has the lowest churn (the amount of subscribers that cancel a service ) across the entire streaming industry at just 2 percent, according to new Antenna data compiled by analysts at technology, media and telecommunications research firm MoffettNathanson.

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That’s better than Netflix’s 3.3%; the average abandonment rate in the sector remained stable at around 6-7%. And 2 percent is double the standalone Disney+ rate (4 percent). Hulu’s self-abandonment rate is 5 percent; ESPN+’s self-abandonment rate is pretty bad, just a little north of 7 percent.

Sixty million, or a hair more than half of Disney’s reported 119.8 million total domestic subscribers, come from the Trio, according to MoffettNathanson. Unsurprisingly, ESPN+ is the one that benefits disproportionately from the package: The service has just 5.3 million self-subscribers, but gets another 20 million thanks to the Trio.

For Michael Nathanson and his team, there is a clear conclusion from the data: “The best path forward is a Disney bundle that incorporates all Hulu, Disney+ and ESPN+ content into one app,” reads the note from Tuesday, obtained by IndieWire. . They called it “a much better opportunity here than it sounds.”

While a Hulu tile is already (read: Finally) coming to Disney+, analysts believe that “ESPN’s sports content should also be integrated.” Why not? The numbers show that ESPN+ is available to too many users, but the three-in-one approach is a keeper. Then really put them in one.

The future of ESPN, the brand, has been debated for some years now. The linear network is a money-printing factory, but the cord-cutting and struggling advertising market has your single most expensive cable channel in the making. ESPN’s requests for full streaming as a standalone SVOD/AVOD hybrid service were met with calls of “Are you crazy?” Crazy as a fox (not a Foxwhich has kept its sports business away since Disney’s 2019 acquisition — and has mostly kept away from streaming) if part of a larger Disney streamer, Nathanson told IndieWire.

HOLLYWOOD, CALIFORNIA - JUNE 09: Bob Iger attends the Searchlight Pictures Los Angeles special screening "Flamin' hot" at Hollywood Post 43 - American Legion on June 9, 2023 in Hollywood, California.  (Photo by Axelle/Bauer-Griffin/FilmMagic)
Bob Iger at the Los Angeles Special Screening of Searchlight Pictures’ “Flamin’ Hot” at the Hollywood Post 43 – American LegionMovie Magic

While it seems inevitable that ESPN will go completely over the top, you shouldn’t slaughter a cash cow until it’s nearing the end of its natural life. And forget about content — these days, cash is king. While Hulu has been seen as profitable for some time, Disney+ is still looking to 2025 to hopefully hit that benchmark.

How bad is the current media landscape? On the same note as all this optimism, Moffett-Nathanson cut his previous DIS price target (but retained his “outperform” valuation) by $7 to $120. Disney shares closed Tuesday just south of $90 a share.