Surprise! Disney’s Bob Iger Calls Linear Networks An Asset
A couple of years after putting the company’s linear networks and broadcast stations on the block, Walt Disney Co. CEO Bob Iger told investors that linear networks now are an asset.
Disney CEO Bob Iger (Photo courtesy of The Walt Disney Co.)
Disney bet billions pivoting its TV business to become a leader in streaming. That gamble appears to be paying off, with Disney reporting $431 million in direct-to-consumer operating income during its fiscal first quarter.
In light of Comcast’s decision to spin NBCUniversal’s cable networks in to a separate company, Iger was asked by an analyst on Disney’s earnings call Wednesday if Disney was interested in selling its cable network to a consolidator.
Iger said no. “The linear networks are not a burden at all they are an asset,” he said. “We are programming them and funding them at levels that give us the ability to enhance our television business. That obviously includes and leads into streaming, which is basically the future of the television business.”
Last year Disney reached a deal to end a blackout with Charter Communications that enabled Charter to include Disney streaming services in its video bundle and allowed Charter to stop carrying some of Disney’s long-tail cable networks.
On the call, Iger added that he wouldn’t rule out the possibility that there might be changes ahead for some of Disney’s smaller networks and how they are brought to market. Those might even get new owners, he said.
Fox announced on its earnings call Tuesday that later this year, it planned to launch a direct-to-consumer streaming service that would carry some of its sports and news programming. (Fox’s Tubi will be streaming the Super Bowl for the first time).
There had been speculation that Disney wanted Fox’s NFL, college football, baseball and other sports programming to be part of the ESPN flagship streaming service that will be introduced in the fall.
Iger was asked about Disney’s streaming strategy after the demise of Venu, the sports streaming joint venture that Disney, Fox and Warner Bros. Discovery buried amid antitrust challenges from DirecTV and Dish.
Fox didn’t come up, but Iger said that “the goal all along is to make ESPN as accessible as possible.”
Iger noted that some consumers will want to watch sports on the app, while others will want it through a more traditional video bundle. Another group will seek out skinny bundles emphasizing live sports and news.
“I cannot predict whether the emergence of the skinny bundle is when you have a material impact on cord cutting or not, except to say that we plan to take advantage of the emergence of these bundles because it is a great way to distribute ESPN,” Iger said.
After paying $15 million to settle a defamation lawsuit against ABC News, Iger said Disney still likes being in the news business and will include new programming in an ever-expanding Disney+.
“We like the opportunity to make room for our news output, both the ABC News output and output of our local stations with improved technology, we are now offering streams on the Disney+ Hulu app,” he said. “News does occupy one of those streams and will continue to be a feature of our overall Disney+ and Hulu offering. It is also something that differentiates us from some of the others in the space.”