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Bob Iger Says Disney's OTT Investment No Threat to Pay-TV

9 Aug, 2016 By: Erik Gruenwedel

Despite pledging $1 billion toward consumer-direct distribution with the minority-stake purchase of BAM Tech, Disney CEO Bob Iger reiterated support for traditional pay-TV.

Speaking Aug. 9 on the Disney fiscal call, Iger said while BAM Tech is a critical component to Disney’s ongoing migration toward over-the-top video, the company’s goal is to ensure that its pay-TV brands, notably ESPN, remain relevant in a changed media landscape.

“We really think [BAM Tech investment is] smart strategically because we obviously need this capability to take product like ESPN, Disney and other Disney IP onto similar platforms. So we feel great about that,” he said.

Disney also announced it would license ESPN, ESPN2, ABC, Freeform, Disney Channel, Disney XD and Disney Junior in DirecTV Now, the online TV service corporate parent AT&T plans to launch later this year.

When asked if including ESPN and Disney Channel in online TV services such as Sling TV, PlayStation Vue and the pending Hulu skinny bundle dilutes the linear access appeal, Iger wasn’t sure. 

NBC Universal, which is offering live Rio Olympics streaming access to pay-TV subscribers, recently cited internal research that found OTT video enhances consumer interest in the primetime broadcast. The media company is using the data to buttress more than 4,500 hours of streaming content from the Games. 

OTT video provides consumers with a high-quality user interface and functionality. The better the user interface, the better for Disney because the customer is going to be more engaged and is likely to consume at higher levels, according Iger.

“I think the consumer is largely going to dictate that, but I think it's important to point out that by us being on these platforms at prices that make sense to us, we're really quite neutral in terms of shifting from a traditional MVPD consumer to an over-the-top consumer.”

Indeed, Disney, for the first time, is supplying pay-TV operators Comcast and DirecTV with current-season stacking access to all episodes of an ABC TV show.

“That's obviously designed to strengthen the traditional MVPD package,” Iger said.

Indeed, recently launched SVOD service DisneyLife in the United Kingdom is intended to be complimentary with a separate pay-TV pact with Sky.

“What is on [DisneyLife] and does not really rob or deprive Sky of product because we're monetizing [it] so much better from Sky,” Iger said.




About the Author: Erik Gruenwedel

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