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Walt Disney CEO Bob Iger spent part of Wednesday morning reminiscing about last August, when he disclosed on an earnings call that ESPN was losing subscribers, a revelation that sunk its stock and that of its competitors.
Iger said he likes to be “really candid” and acknowledged “disruptive trends” that “caused ripples,” though he hinted that Wall Street overreacted because it is focused on quarterly financial results while Disney and ESPN are far more concerned with long-term health.
ESPN needs to be “much more aggressive at getting on new platforms,” Iger said Wednesday at the MoffettNathanson Media & Communications Summit. He said discussions are underway with various parties to get ESPN included in skinny bundles, and said that when Sony PlayStation Vue added ESPN, “sub adoption went up tremendously.”
ESPN’s sub count fell from 99 million to 92 million, Disney disclosed last year, and it said recently subs fell again, but it didn’t give an exact count. Iger said Wednesday that the reason some subscribers have ditched the sports network is because they are opting for smaller bundles of cable channels to save money.
He called ESPN “a pure demographic for advertisers” and reiterated his bullishness long-term.
Iger said Hulu plans to become a virtual MVPD by offering some live TV — a controversial move, according to traditional cable TV companies — and Disney programming could be there.
“They’re coming, and we’re very enthusiastic about that, not just as part owner of Hulu but as a channel owner and as a programmer,” he said.
“They’ve become a big buyer of our programs already and them becoming a distributor of our channels we think is great,” Iger said of Hulu. “We’ve seen the interface because we’re partners. It’s a great interface, a tremendous user experience, and we’re in discussions with them about our channels and about prices.”
While some cable executives have complained that Disney programming live via Internet lessens the value of the channels by traditional means, Iger didn’t seem to share their concerns.
“New entrants into the marketplace we think is great,” he said. “Basically, it’s more mouths to feed in terms of buying our programming. But I also think the new entrants will keep the legacy entrants more honest when it comes to, not just what they’re paying us, but the user interface.”
On ABC, Iger said there is validity to consumer wishes that all the episodes of all the shows be available through whichever provider they use, be it Comcast, DirecTV or whatever else, though the economics to that vision are challenging.
He spent most of the session showing off images of Shanghai Disney Resort, a project 17 years in the making “near and dear to my heart,” Iger said. Shanghai Disney is already letting friends and family in to test out the giant theme park in China, though it opens to the public June 17.
Unlike other Disney parks all over the world, there is no Main Street U.S.A. there; instead it’s called Mickey Avenue, Iger said, but there will be a “strong presence” of Star Wars characters.
There’s also Star Wars lands being built at parks in California and Florida, a secret Marvel initiative at one or some of the parks that Iger wouldn’t talk about and an Iron Man feature coming to the park in Hong Kong.
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