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Disney COO: No Plans for Consumer-Direct OTT Video

10 Sep, 2015 By: Erik Gruenwedel

Disney COO Tom Staggs

Tom Staggs says the media giant remains foremost a supporter of existing pay-TV ecosystem

In a home entertainment market beset with over-the-top video options, The Walt Disney Co. remains committed to the pay-TV channel bundle, COO Tom Staggs told an investor group.

Speaking Sept. 10 at the Bank of America Merrill Lynch 2015 Media, Communications & Entertainment Conference in Beverly Hills, Calif., Staggs said Disney properties such as ESPN, ABC TV and Disney Channel remain strong brands that will be requisites in an evolving distribution market that includes consumer-direct access. 

“You look at the strength of our programming, we feel very good where we sit. ESPN, in particular, continues to be the one of the most important and valuable brands in programming,” Staggs said.

ESPN last month triggered what Staggs called a market overreaction when it disclosed a slight decline in second-quarter subscribers. The drop resulted in stock market capitalization losses across the media landscape.

Staggs said ESPN remains a valuable asset for affiliates in terms of ad sales and broadband upgrades, in addition to its slate of live sports programming. He said the Sept. 8 U.S. Open women’s quarterfinal between Venus and Serena Williams delivered the second-highest ratings for a tennis match on ESPN.

Through Sept. 7, ESPN aired 48 college football games, with many available on TV Everywhere app WatchESPN. Staggs said digital viewership was up 60% from the same time last year, with portable device access up 50%.

“We continue to see viewership across those platforms grow. It wouldn’t surprise me that for people who are multiplatform users, they are spending the most time also on linear TV. One [platform] reinforces the other,” he said.

Despite that appeal, Staggs said the burgeoning subscription streaming market remains fluid and that decisions made regarding bowing applicable OTT video platforms would only occur to maximize exiting distribution channels and Disney programming “as a whole.”

“In the foreseeable future I don’t see over-the-top … as an outcome that’s going to happen [for us],” he said. 

The COO said monetizing stacking rights to episodic programming likely remains strongest with pay-TV, while also monetizing catalog through SVOD and new entrants in the marketplace.

“We want to take a holistic view of all of this. We continue to believe in the value and appeal of the multichannel bundle. And that value and appeal is going to continue for some time,” Staggs said, adding that opportunities exist to improve pay-TV to subscribers. “The [channel] bundle shouldn’t be viewed as a static product.”

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