Finding an audience for Venu, the $42.99 per month sports streamer, presents a challenging marketing task.

• Venu Sports will be a case study in the value of marketing.
• For five years, Sling TV has been losing customers despite offering a product similar to Venu Sports.
• This fall, the streaming service will cost $42.99 per month when it launches, as stated by Venu on Thursday.

Call Don Draper, Venu Sports may have a marketing problem

The jointly-owned streaming service announced on Thursday that it will launch this fall at $42.99 per month. This is significantly more expensive than other major subscription streaming services such as Netflix, Hulu, and Amazon Prime Video. However, it is much less expensive than YouTube TV and a standard cable bundle, which offer a wider variety of entertainment content beyond sports.

Venu will offer consumers access to a variety of networks, including ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, Fox, FS1, FS2, BTN, TNT, TBS, and truTV. Subscribers will also receive ESPN+. The plan will launch before the football season, but it does not include CBS and NBC, which have rights to many sports, including college football and NFL games.

Venu's target audience is individuals who are willing to pay a high monthly fee for a limited selection of media content, specifically live sports, but not all live sports. The company is positioning itself as a product for "cord nevers" - a group of younger consumers who have not wanted to pay for cable due to its high cost, but have been looking for access to ESPN and other live sports.

It's entirely unclear this user base will materialize.

The total addressable market for Venu to succeed may be limited due to the fact that many non-cable subscribers prefer to watch highlights and influencer commentary on YouTube instead of paying for cable. A survey by Kantar, cited by YouTube at its 2024 upfront, revealed that 54% of people would rather watch creators break down a major live event than actually watch the event.

Younger NFL enthusiasts will need to purchase Peacock and Paramount+, the streaming services linked to NBC and CBS, in order to access a comprehensive selection of NFL games. Alternatively, they could use a digital antenna in conjunction with Venu, although the adoption of antennas among this age group may be somewhat paradoxical.

The Olympics, being an event broadcasted by NBCUniversal, will not be available on Venu.

An existing player

A product similar to Venu already exists and could be a better option.

Echostar's Sling TV offers 46 networks for $60 per month, including ESPN, TNT, TBS, Fox, and ABC, as well as NBC, CNN, Fox News, MSNBC, Bravo, USA, HLN, Discovery NFL Network, and more. Additionally, consumers can take advantage of an introductory offer and pay only $30 for the first month.

Despite losing 135,000 subscribers in the first quarter, Sling TV's customer base remained relatively stable, with 1.92 million subscribers as of March.

In 2021, Sling TV had 2.5 million customers, a decrease from the 2.7 million subscribers it had in 2019.

The decline of the company last quarter was attributed to the presence of other streaming services.

Echostar stated in a filing that we are facing intensified competition from various subscription video-on-demand and live-linear OTT service providers, many of whom offer our content and provide direct access to football and other seasonal sports programming to subscribers on a pay-per-view basis.

Despite being a more comprehensive option than Venu, Sling TV has been losing subscribers for five years and never exceeded 2.7 million as its peak, at a cost of approximately $17 more per month.

Venu faces a marketing challenge in convincing consumers to sign up for its branding and technology.

The company hopes that its $43 per month offer will last long enough for it to take advantage of the $17 delta. The typical pattern for bundles of live networks is that they start with an introductory offer and then raise prices. Venu hinted at this in its press release, telling consumers that they could lock in the $43 per-month price for 12 months from the time of sign-up, suggesting that a price increase may be coming.

To increase the variety of sports offered in the serve, Venu may need to raise the price, which could make it more challenging to convince cord-nevers of its value.

Disney is planning to launch an ESPN Flagship streaming service in the fall of 2025, which will offer ESPN at a lower price than Venu.

The companies Disney, Warner Bros. Discovery, and Fox are aiming for maximum coverage with their new service, similar to how the Apple iPad mini fit into their existing product lineup. They believe there is an audience for Venu and want to cater to it. Fox CEO Lachlan Murdoch predicts that the service can attract 5 million subscribers in the next five years.

Sling TV's struggles make achieving 5 million subscribers seem challenging. To reach this goal, a significant amount of money will need to be invested in marketing efforts.

And that effort may be so costly that it defeats the purpose.

NBC Sports broadcasts NFL games and NBC Olympics holds the U.S. broadcast rights to all Summer and Winter Games through 2032.