×
You will be redirected back to your article in seconds

Bob Iger: Disney Sets ‘Extremely Important Strategic Shift’ With Movie, ESPN Streaming Launches

Disney is ready to deploy some of the company’s crown jewels — Disney- and Pixar-branded movies and ESPN — in an effort to position itself for the future by embracing the emerging world of direct-to-consumer streaming services.

The plans unveiled Tuesday by Disney chairman-CEO Bob Iger amount to a massive strategic shift in the company’s content distribution strategy, one that aims to leverage the unique affinity that consumers have for the Disney brand name and the love that sports fans have for ESPN. The streaming push is enabled by Disney’s acquisition of a majority stake in BAMTech, the streaming platform that Iger credited with making the ambitious programming ventures possible because of the strength of its technology.

“We have to look at both of these (services) as huge priorities for the company,” Iger told Wall Street analysts during the company’s fiscal third quarter earnings call. “This is an extremely important strategic shift for us. … I would put this at the top of our list in terms of the company’s strategic priorities in the next couple of years.”

The major news that came out of Iger’s discussion with analysts:

— Disney will launch an ESPN-branded streaming service early next year that is a vast expansion of the sports OTT product that has been in the works for some time. The new service will give users the chance to pick and choose from specific sports leagues and games and will offer some 10,000 events not carried on ESPN’s linear channels.

— Disney intends to launch a movie and TV service featuring Disney- and Pixar-branded titles, as well as original movie and TV series productions and some library product. That service will kick off with the pay TV window for the company’s 2019 theatrical slate, which includes “Toy Story 4” and the sequel to “Frozen.” This means that Disney is ending the pay TV output deal with Netflix that began in 2016.

— Disney is still determining how to handle pay TV licensing for its Marvel and Lucasfilm/”Star Wars” branded titles. Iger said Disney may stick with a traditional third-party licensing deals for those movies, or they could be added to the Disney-branded streaming service.

— There’s been no decisions made yet on pricing for the new services. The ESPN streaming service will have advertising, but the movie-centric service will not.

— Subscribers to MVPD services will have authenticated access to the enhanced ESPN OTT offering, although they will have to pay incremental fees for the non-linear content hosted by the apps.

— The movie service is envisioned as a global offering, although the initial rollout will be constrained in some markets by existing output deals and market conditions, Iger said.

— Disney at present does not intend to use the movie service to experiment with day-and-date theatrical releases on VOD. Iger said the movie-centric service would adhere to the traditional pay TV window in which titles become available about nine to 10 months after their theatrical release.

Iger said the move to bring Disney boldly into the direct-to-consumer arena was driven by what he called “global trends in app-based media consumption over direct-to-consumer services.” The evidence of a massive shift in consumer behavior has added urgency to Disney’s desire to capitalize on its uniquely strong corporate brand.

“We’ve got this unbelievably passionate base of Disney consumers worldwide that we’ve never had the opportunity to connect with directly other than through the parks,” Iger said. “It’s high time we got into the business to accomplish that.”

Iger acknowledged that the decision to act was spurred by the disruption in the traditional TV eco-system that has been rocking ESPN for the past few years. But Disney’s blue-chip brands give them a leg up in taking a radical new approach to reaching consumers.

“It’s not just a defensive movie, it’s an offensive move,” Iger said.

Pressed by analysts, Iger acknowledged the company could face some backlash from its traditional MVPD and streaming partners as it positions the company to fly solo to a greater degree. But it’s a risk worth taking, he said.

“There will be some sacrifices,” Iger said. “We believe ultimately the profitability and the revenue-generating capability of this initiative is substantially greater than the business models we’re currently being served by.” ESPN and other Disney TV services have a round of MVPD negotiations coming up, but Iger isn’t worried that the largest operators will retaliate.

“We have all the confidence in the world in our ability to strike deals favorable to the company given the strength of the product we offer,” he said. He said that while Disney may face “suboptimal circumstances” with some distributors because of the streaming push, the company will work to give its traditional partners the chance to help distribute its app-based services.

Iger also emphasized that Disney’s film and TV production units are gearing up to invest more in original productions to feed the movie-centric streaming service.

“We’ve already begun the development process at Disney Channel and at the studio for original TV series and original movies for this service,” he said. “This will represent a larger investment in Disney-branded intellectual property.”

More TV

  • Kyzza Terrazas Joins Garcia Bernal, Diego

    Kyzza Terrazas Joins Gael Garcia Bernal, Diego Luna’s La Corriente del Golfo (EXCLUSIVE)

    BUENOS AIRES — Launching their new production house, La Corriente de Golfo, last April, Gael García Bernal and Diego Luna have tapped Mexican writer-director Kyzza Terrazas as the company’s head of development. The appointment will certainly help build the company appointing an old-rounder capable of overseeing and implementing development, writing and directing, and a longtime [...]

  • Michael Che Defends Kevin Hart on

    Michael Che Ribs Academy Over Kevin Hart Controversy on 'SNL'

    Kevin Hart may have alienated some in Hollywood over his recently resurfaced homophobic tweets, but that didn’t stop “Weekend Update” co-host Michael Che from cracking some jokes in support of Hart on Dec. 8’s “Saturday Night Live.” After briefly recapping that Hart stepped down from hosting the Oscars after the 2011 tweets came to light, [...]

  • THE UMBRELLA ACADEMY

    'The Umbrella Academy' Superheroes Series Premiere Date Set on Netflix

    The dysfunctional-family superheroes of “The Umbrella Academy” are landing on Netflix worldwide on Feb. 15, 2019. The live-action series is based on the “Umbrella Academy” comic books created and written by Gerard Way and illustrated by Gabriel Bá, published by Dark Horse Comics. The Netflix original series comprises 10 one-hour episodes. “The Umbrella Academy” stars [...]

  • SATURDAY NIGHT LIVE -- "Jason Momoa"

    Robert De Niro Appears as Robert Mueller in 'Saturday Night Live' Cold Open

    Robert De Niro made a surprise appearance as special counsel Robert Mueller in “Saturday Night Live’s” cold open. De Niro popped out of a closet in a sketch that skewered President Donald Trump and the mounting legal pressure Mueller’s investigation has put on many of Trump’s associates. Alex Moffatt played Eric Trump in a bedtime-story [...]

  • ‘The Breadwinner,’ ‘Ivandoe’ Top 2019 European

    ‘The Breadwinner,’ ‘The Heroic Quest of the Valiant Prince Ivandoe’ Top 2018 Emile Awards

    LILLE, France – “The Breadwinner” director Nora Twomey and “The Heroic Quest of the Valiant Prince Ivandoe” directors Christian Bøving-Andersen and Eva Lee Wallberg took top honors at Saturday night’s second edition of the European Animation Awards (EAA) in Lille, France, scooping best feature and best TV/broadcast production respectively. It was an evening of beautiful [...]

  • The King Eric Clapton A Life

    Rashida Jones, Lili Zanuck Talk Grammy Nominations and the Music-Documentary Gold Rush

    Nothing takes you back to time and a place like the music of a particular era. That’s one big reason why music documentaries are flourishing at a time of enormous demand for high-end docu productions. This year’s five Grammy Award nominees for best music film reflect the appetite for stories about renowned and beloved musical figures, [...]

  • Sacred Games Indian Television

    'Sacred Games,' 'Miss Sherlock' Win Asian Academy Creative Awards

    Hulu Japan and HBO Asia’s “Miss Sherlock” won best drama series at the inaugural Asian Academy Creative Awards. The awards were spread over two evenings at Singapore’s Capitol Theatre on Friday and Saturday. India’s Anurag Kashyap won best direction (fiction) for season one of Netflix original series “Sacred Games.” The series also won best editing [...]

More From Our Brands

Access exclusive content