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Investing.com -- KeyBanc Capital Markets said its latest media survey shows mixed results for ESPN’s new streaming product while Netflix continues to gain traction with users.
According to KeyBanc, “ESPN Unlimited might drive ARPU, but not subs.”
The survey found that 44% of current ESPN subscribers had signed up for ESPN Unlimited, either through a standalone package (24%) or as part of a bundle (20%).
However, “67% of non-ESPN customers were somewhat or very unlikely to try ESPN ‘Unlimited,’” highlighting the challenge of attracting new subscribers.
KeyBanc also flagged the importance of sports rights, particularly the Ultimate Fighting Championship.
The firm said, “65% of ESPN subscribers find UFC content important to their decision to subscribe,” underscoring the role of individual programming in retention.
Meanwhile, streaming adoption around live sports continues to climb. KeyBanc observed a six-point year-over-year lift in NFL Sunday Ticket penetration, with 77% of respondents saying the package was the reason they subscribed to YouTube TV.
“We view the success of NFL Sunday Ticket (YouTube), Thursday Night Football (Amazon), [and] Christmas Day games (Netflix) as a sign that the NFL likely is not realizing fair value with its existing deal,” KeyBanc wrote, adding that aggressive bidding is likely if rights are renegotiated.
Netflix emerged as the clear winner among streaming platforms in the survey. Both penetration and engagement increased, with KeyBanc noting that “Netflix remains a core service and that the lower-priced ad-tier is expanding the market.”
The firm also said the likelihood of canceling Netflix in the event of a price increase had declined.
KeyBanc maintained Overweight ratings on Comcast, Netflix, Roku, and Alphabet.