Dis­ney’s big move into on­line video

China Daily (Canada) - - LIFE - By BLOOMBERG

The Walt Dis­ney Co re­ported third-quar­ter re­sults that re­flected tough times for its TV business and said it’s tak­ing big steps in on­line video to adapt to chang­ing con­sumer view­ing habits.

The world’s largest en­ter­tain­ment com­pany said on Tues­day it will pay $1 bil­lion for a one-third stake in BAMTech Inc, a tech­nol­ogy and stream­ing business formed by the Ma­jor League Base­ball, and launch a new web-based ESPN ser­vice this year.

The com­pany also said net­works in­clud­ingESPNand the Dis­ney Chan­nel will be part of a new on­line video ser­vice planned by AT&T Inc’s DirecTV di­vi­sion.

“This is a whole new world where dis­trib­u­tors are go­ing into the con­tent space and con­tent own­ers are go­ing into the dis­tri­bu­tion space,” Dis­ney Chief Ex­ec­u­tive Of­fi­cer Bob Iger said in an in­ter­view on Tues­day. “We are look­ing at a mar­ket­place that is so dy­namic.”

The chang­ing mar­ket for pay tele­vi­sion, marked by a drop in sub­scribers for con­ven­tional ca­ble and satel­lite ser­vices, is forc­ing com­pa­nies like Bur­bank, Cal­i­for­nia-based Dis­ney to re­think how they of­fer pro­gram­ming.

TV chan­nels in­clud­ing ESPN, the Dis­neyChan­nel and the ABC net­work are the big­gest con­trib­u­tors to Dis­ney’s sales and profit. The com­pany said ESPN con­tin­ued to lose sub­scribers in the quar­ter that ended on July 2.

Just how con­cerned in­vestors are about those busi­nesses was ap­par­ent af­ter Dis­ney re­ported fis­cal third-quar­ter re­sults. De­spite beat­ing an­a­lysts’ es­ti­mates on higher profit from mo­tion-pic­ture hits and theme parks, Dis­ney fell as much as 1.9 per­cent to $94.80 in late trad­ing.

The ca­ble TV unit’s re­sults help ex­plain why. The di­vi­sion reg­is­tered a nar­row 1 per­cent in­crease in third-quar­ter earn­ings and sales. Higher TV pro­gram­ming costs and sub­scriber losses coun­tered ris­ing ad­ver­tis­ing and af­fil­i­ate fees in the ca­ble di­vi­sion, the com­pany said.

Third-quar­ter profit ex­clud­ing some items rose to $1.62 a share, Dis­ney said in a state­ment.

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