Wednesday, February 8, 2017
Iger: 'Too Much Pessimism About ESPN'
With ESPN continuing to weigh on Disney's results, CEO Bob Iger said in an exclusive CNBC interview that concerns about the network's subscriber losses are overblown. While ESPN has seen some erosion from consumers switching to skinnier cable bundles, he says Disney's strategy of including ESPN and Disney's other cable networks on all the digital TV bundles in the works will be a game changer.
"I think there's way too much pessimism about ESPN because ESPN is still in demand from three constituents you want to be in demand the most from," said Iger. "One – distributors. Two, consumers and three, advertisers. And the reason it's in demand is the brand is still strong, the product is still good and we've invested nicely to keep that product as high quality as possible."
On Tuesday's earning call, Disney CEO Bob Iger gave a lot of insight into how he thinks about the future of TV, and he seems particularly focused on new streaming TV packages, which compete with cable and satellite TV, and on "a la carte" services like HBO Now or CBS All Access.
ESPN saw a decline in revenue this quarter, and while Disney blamed most of it on a quirk in the college football schedule, Disney did acknowledge a decrease in subscribers. ESPN has lost over 9 million subscribers since 2013, according to Nielsen, and it's a problem that isn't likely to stop any time soon.
But Iger was upbeat about ESPN, and described a future for the network very much tied to an evolution of the TV landscape, reports Business Insider.
Iger said ESPN was already seeing "nice gains" in subscribers from streaming TV packages like Dish's Sling TV, AT&T's DirecTV Now, and Sony's Vue. (He said these haven't been fully counted by Nielsen.) These TV packages function much like a traditional cable or satellite TV plan, but are delivered over the internet, and are generally less expensive.
Disney is focused on making sure ESPN is in every package, even the ones with fewer channels.
Iger argued that if we end up in a world where $40 to $50 per month TV packages are more popular, that might actually be an opening for ESPN to capitalize on, rather than drop out of packages.
Iger said Disney would "aggressively" develop direct-to-consumer offerings, and that one tied to ESPN would launch "in calendar 2017."
Posted 4:39:00 AM