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Bob Iger: We’ve Learned A Lot With 'DisneyLife'

9 Mar, 2016 By: Erik Gruenwedel

Despite steadfastly pledging allegiance to the traditional pay-TV ecosystem, The Walt Disney Co. is quietly exploring digital distribution, including going direct-to-consumer. The media giant late last year in the United Kingdom launched DisneyLife, a subscription streaming service offering catalog movies, TV shows, books and video games. The service was subsequently expanded to China.

Speaking March 9 at the Deutsche Bank 2016 Media, Internet & Telecom Conference in Palm Beach, Fla., Disney CEO Bob Iger said the U.K. rollout has helped the company better understand online distribution, related technology requirements, including competing iOS and Android operating systems.

“We've learned a lot about the technology … [and] gotten a strong sense for our pricing,” Iger said. “It's still early. I won't give numbers, I won't even characterize how well it’s done or not, except that we have learned a lot about it.”

Specifically, Iger said SVOD consumers appear to prefer video content; not books and video games.

“They’re subscribing to this [service] for movies and television … and that the Disney [brand] matters. The opportunity to launch [DisneyLife] in other markets we believe is pretty great. We just haven't made any decisions about which markets and when.”

Going direct-to-consumer has dogged Iger since the executive admitted subscribers at flagship sports network ESPN had declined. With ESPN a lucrative benchmark of pay-TV, the notion it was losing subs — about 7 million over two years — ratcheted scuttlebutt suggesting ESPN would be going direct to consumers.

Instead, Iger contends making ESPN a standalone service is a non-starter and widely misunderstood. He said sub growth has returned (ESPN has more than 90 million subs), while reiterating the sports network has to be part of any third-party skinny TV channel bundle. It was launched last year with Dish Network’s new Sling TV service. It is available on Charter’s Spectrum TV Plus as well as Sony’s PlayStation Vue, among other skinny bundles.

Disney is considering offering select portions of ESPN to skinny bundles in order to appeal to pay-TV subs unwilling to opt into higher-priced plans offering myriad ESPN channels, including ESPN, ESPN 2, ESPN Classic and ESPN News.

“Is there a fantastic or perfect skinny bundle out there, I actually don't know,” Iger said. “I don't think it's a one-size-fits all [situation], nor do I think there is a switch that one day someone turns and suddenly we shut off ESPN and the expanded basic bundle, and we go direct-to-consumer.”

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