Source: ESPN/Disney.

After posting record-breaking fiscal first quarter results, The Walt Disney Company's (NYSE:DIS) stock fell nearly 5% in the after-hours markets. The reason why is because strong performance from the company's recently released Star Wars film offset lower segment-operating profit from Disney's all-important media networks division.

During the call, Disney CEO Bob Iger did report positive results from Disney's key ESPN network by mentioning the company had seen a recent uptick in subscribers, and singled out the channel's inclusion in Dish Network's (NASDAQ:DISH) SlingTV skinny-bundle offering as a reason behind subscriber growth. Iger also mentioned Disney is in talks with other multichannel video programming distributors, or MVPDs, to include ESPN in more skinny packages.

Following Iger's lead, ESPN President John Skipper commented on new partnerships at the Code/Media conference: "I think other people will enter into some markets with lighter packages this calendar year."

Will anybody follow Dish's example?
Unfortunately, Skipper declined to name companies, with the exception of a "multi-stream" product with Dish. It makes sense for ESPN to seek deals to be included in as many skinny bundles as it can in order to shape the future of this product using the power of its brand; but does it even benefit providers to offer a skinny bundle?

It doesn't seem as if the skinny bundle has helped ESPN's most-visible MVNO partner Dish Network. Media research firm MoffettNathanson estimates the company added 129,000 SlingTV subscribers in the recently reported fourth fiscal quarter, while losing 141,000 traditional-package subscribers. Unfortunately, the company doesn't break down the composition of subscribers, but the company lost approximately 80,000 total subscribers (including SlingTV adds) on a year-on-year basis by reporting 13.9 million total subscribers versus 13.98 million at the end of 2014.

At best, it seems SlingTV is unable to offset large-package defectors; at worst, it's actually cannibalizing more-lucrative consumers by offering a lower-cost product. Investors appear not to care which version is correct, as shares of the company finished down more than 6% in the wake of its poor results.

ESPN will not go over the top
One thing Skipper was adamant about was ESPN's plans to launch an over-the-top offering. When addressing the chances of bringing such a service to market, Skipper commented, "we do not believe it right now to be a good business." The economics do appear to be unfavorable for a stand-alone ESPN product.

Last year, The Wall Street Journal (subscription required) reported that ESPN would have to charge roughly $30 per month as a stand-alone channel to make the same amount of money it does under the current large-package model. According to a survey of 1,600 people commissioned by BTIG Research, only 6% of people would pay $20 per month to have ESPN and ESPN2 as a stand-alone offering.

However, the real reason ESPN would not go over the top is hidden in another question from the BTIG poll. In response to the question, "would you remove ESPN and ESPN2 in order to save $8 per month," 56% of all respondents answered in the affirmative. That's important because most estimates peg the combined cost of both channels at nearly $8 dollars.

In the event Disney goes direct to consumers and bypasses these MVPDs, it stands to reason that new packages without the network will become more prevalent and heavily marketed in the event ESPN went over the top.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.