Disney CEO: We Saw Value in Sling TV5 May, 2015 By: Erik Gruenwedel
Walt Disney’s ESPN and ESPN 2 essentially enabled Dish Network to launch its revolutionary over-the-top video service Sling TV.
The OTT video service offers 20 basic channels, including AMC Networks, TNT and TBS, for $20 a month without a contract. Disney CEO Bob Iger said he welcomes new content distribution models that are attractive to consumers provided they are accretive to the bottom line.
“We thought there was value [with Sling TV] from a strategic and a financial perspective,” Iger said on the media giant’s May 5 fiscal call.
At the same time, Disney remains protective of the pay-TV ecosystem, filing litigation against Verizon’s FiOS Custom TV offer of a separate sport package featuring ESPN, and electing not to participate in Sony’s PlayStation Vue online service for financial reasons.
Iger said unbundling the multitier channel service can have unintended costs to budget-conscience consumers, including incremental costs for high-speed Internet.
“That cost goes up exponentially,” he said, adding that questions remain how large monthly savings have to be to consider abandoning the bundle for so-called skinny packages with less choice. Thus far, Iger said there appears to be no “disturbing trend” regarding OTT video’s impact on pay-TV.
“The jury is still out on a lot of this,” Iger said.
When asked why Disney doesn’t bypass Sling TV and go direct to broadband-only consumers with ESPN and general level entertainment, Iger said Disney has the ability to launch standalone branded OTT video services, including in the future Star Wars and Marvel.
“We do have the ability to take product, specifically filmed entertainment and television movies to consumers. And we have some development underway to do just that,” he said.
But Iger reiterated that pay-TV and emerging channels have spent resources to acquire consumers, create platforms and manage consumer relations effectively.
“As long as the current distribution ecosystem or the one that seems to be emerging continues to create value for us, then we’ll rely on it to distribute our product,” he said.
Iger said entertainment is entering into a “pretty interesting” world where technology is “a friend for the most part” of high-quality media.
“We’re viewing this as a new world order,” he said.