Bob Iger said today that charging online viewers directly for some of its most popular programming is a possibility, but cautioned “we do not believe that there is any reason for us” to do it right now.
Disney chief executive Bob Iger said today on a call with analysts to discuss the company’s earnings that the it could potentially offer some of its most popular video content — ESPN, Star Wars, and Marvel — over the internet directly to consumers. Iger said that the company “may have an opportunity to bring out a Marvel-type product and possibly even Star Wars.”
Iger said that Disney could do this to boost its own profits “by taking out the middle man” and to “create a closer relationship with the a consumer that can be mined for other revenue generating purposes.” But none of this is just around the corner — Iger also stressed that for now, the cable bundle system is working just fine for the company and its bottom line.
Marvel Entertainment and Lucasfilm are both subsidiaries of Disney and, in addition to new Star Wars and Avengers movies being produced and distributed by Disney, Marvel’s Agents of Shield and Agent Carter air on Disney-owned ABC.
ESPN, ESPN 2 and the Disney Channel are already available on Dish Network’s broadband Sling TV product and Disney makes ESPN content available to cable subscribers through Watch ESPN. In its latest nine year contract with the NBA, ESPN won the rights to air some basketball games directly over the web. ESPN’s programming has never been more popular, especially the recent inaugural college football playoff.
The national championship game between Oregon and Ohio State drew the highest rating in cable history, averaging over 33 million viewers, with the two semifinal games drawing over 28 million viewers each, making them the second and third most viewed cable broadcasts. ESPN generates billions of dollars of revenue just from payments from cable companies and costs about four times as much per viewer as the next-most-expensive cable channel, TNT.
Iger said that there are 12 million broadband-only subscribers who don’t have cable, and “that’s the subscriber that we’re trying to reach with the Sling package,” although he also noted that “it’s a worthwhile experiment…to try to convince young people or younger people to sign up to cable when they either wouldn’t have signed up for it at all or they might have waited.”
But don’t get too excited about watching the Avengers, Skywalkers, and Crimson Tide directly to your TV without a cable subscription. “We also are mindful of the value of the expanded basic bundle to this company” Iger said. “We do not believe that there is any reason for us to attempt to take out some of this product — particularly ESPN — quickly or right now.”