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Bob Iger: Disney to Steer Content to New Streaming Service, Not Dependent on Fox Deal

Disney’s plan to launch a direct-to-consumer entertainment streaming service does not hinge on completing its deal to acquire key 21st Century Fox TV and film assets.

Bob Iger, speaking with Wall Street analysts on Tuesday about the company’s fiscal second quarter earnings, said the pending $52.4 billion buyout would enhance Disney’s offering. But the streaming service was envisioned prior to the Fox deal coming together and will be rooted in content carrying Disney’s gold-plated imprints: Disney, Pixar, Marvel, and “Star Wars.”

“It’s not dependent at all on the assets we’re buying from Fox,” Iger said. He emphasized that Disney is committed to making the bulk of its film and TV library available exclusively on its proprietary streaming service in order to make sure it is a must-have for families. That marks a significant investment from Disney in the decision to forgo third-party licensing coin.

“It has to become the destination to watch Disney, Marvel, ‘Star Wars,’ and Pixar product,” Iger said. “That means ultimately weaning ourselves of product being available any other place except for (first-run) linear channels.”

The fate of Disney’s deal to buy 21st Century Fox has grown murkier in the past week as Comcast is taking steps to mount an all-cash counterbid that could put pressure on Disney to sweeten the terms of its all-stock takeover of 20th Century Fox, FX Networks, National Geographic Global Networks, and Fox’s regional sports networks.

Iger said content from the Nat Geo channels would be a natural fit with the Disney-branded streaming service. Fox’s regional sports cablers will also be boon to the ESPN Plus sports streaming service that launched last month. But he reiterated that both services were conceived before the Fox assets were in the picture.

Disney’s family-focused streaming service will launch by the end of 2019. The timing is dictated in part by the end of Disney’s theatrical output deal with Netflix, in order to ensure that recent Disney titles will have their pay-TV window on Disney’s service. Disney also needs time to develop original content for the service. Iger said more details on the original content plan will be revealed “in the coming months.”

“We’re feeling quite good about the direction we’re headed there,” Iger said. “We’re looking for quality over quantity. Not massive amounts of content. We’re looking for high-quality content utilizing those (Pixar, Marvel, ‘Star Wars,’ and Disney) brands and franchises, and the characters that fall into those brands.”

Iger did not address the potential for a showdown with Comcast over the 21st Century Fox assets, nor did he address Comcast’s bid to buy out the Sky satellite platform. Disney is set to acquire Fox’s 39% stake in Sky, or more if Fox’s acquisition of the remainder of Sky is completed before the Disney-Fox acquisition is final. Comcast’s $31 billion bid for all of Sky has thrown a wrench in Fox’s plans for Sky. Fox sought to buy up the remainder of Sky for about $15 billion but the deal, first struck in December 2016, has been under heavy fire from U.K. lawmakers and bogged down in a regulatory review.

Regarding Sky’s role in the global streaming businesses Disney hopes will be the engine of future growth, Iger would only say that he has been impressed with the technology and infrastructure Sky has built in the U.K., Ireland, Germany, and Italy.

“A platform that can bring product to consumers in a very, very user-friendly and efficient way and monetize it in the process is something we think is attractive,” he said. 

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