Bob Iger: Disney is 'under-appreciated'

10:34 AM PST 09/21/2010 by Georg Szalai, AP

Points out study that ranks it as ninth most-valued brand

NEW YORK - "At times we feel under-appreciated," Walt Disney CEO Bob Iger told a Wall Street crowd here Tuesday when asked what investors tend to miss or under-appreciate about Disney.

Speaking at the 19th annual Goldman Sachs Communacopia conference for media and entertainment investors, Iger also highlighted prospects for Disney's ABC to get more of the retransmission consent fees earned by TV station groups that are ABC affiliates and touched on various other issues.

Iger cited an Interbrand global study on brand value from last week that ranked Disney ninth. Out of entertainment giants, only MTV in the 55th spot made the top 100, too. Citing the acquisition of Marvel and previously Pixar, as well as the continued strength of ESPN and other brands, Iger argued Disney's brands are stronger than ever.

Iger reiterated that Disney is, for example, concentrating its film output on strong brand names - Disney, Pixar and Marvel, while fading out the focus on Touchstone Pictures, which this week is releasing "You Again." The firm's return on invested capital is better on those brands, he told the Goldman conference.

He also told investors that Disney won't sell ESPN.

"I know [AT&T CEO] Randall Stephenson would like to buy it," Iger said, explaining he had run into him in the hallway, and the AT&T boss had joked about the issue.

ESPN boss George Bodenheimer accompanied Iger to the conference, but didn't join him on stage. Walking into the conference room together to check out the session were The Weinstein Co.'s Harvey Weinstein and former William Morris boss, and current AOL consultant, Jim Wiatt who sat next to each other during Iger's appearance.

Asked about his outlook for ABC retransmission consent fees, Iger signaled this business will grow over time: "We do expect to see a portion of retransmission consent fees that cable operators and satellite providers are paying our affiliates," he said when asked whether ABC station affiliates that Disney doesn't own will pay the company more in the future. It has done some such deals already, and more are expected.  "We will get more cash from their retransmission" consent fees, Iger said

Asked about technological change in the entertainment industry, Iger said Disney has probably been more aggressive than its peers to try new approaches and make content available in digital forms. He cited the ESPN3.com Web service as one example.

Disney's rationale has been that it is "much better off aligning with technology companies than fighting them," Iger explained, saying he has been encouraged by Disney's digital business.

But he said Disney also stays mindful of traditional businesses and tries to strike a "delicate balance" between new and older media models. "We're still mindful what product we put on," when and how it is priced, he said.

Asked about recurring fears of cord cutting by cable TV subscribers, Iger said:
"We have not seen any evidence of cord cutting...Especially given the economy, we thought that was great news."

He added: "The channel business is not only alive and well, but doing better" than some thought.

Iger on Tuesday also once again emphasized that Disney doesn't feel it needs a deal with a DVD rental kiosk operator that would keep Disney DVDs from the $1 service for the 28 days windows that several other studios have negotiated.

"We have not seen cannibalization from the very low-priced rental model," Iger told Goldman attendees, arguing that there wouldn't be extra money to make from a Redbox window amid the decline in the DVD market of recent years.

He cited DVD sales as another key reason for why Disney has emphasized its strongest film brands, because they tend to release films that consumers want to collect.

Discussing the consumer products business, Iger also picked up the theme of brands and under-appreciation. He cited how the consumer products unit has grown the Disney Princesses franchise by billions. "That's a big deal," he said. Iger also suggested that "Cars 2" has more potential because consumer products for the first movie did so well and strengthened fans' connection with the brand.
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