Content owners seek control of distribution

As broadband distributors including AT&T try to own some of the content that flows through their pipes, content owners are not sitting on the sidelines, writes Shannon Bond.

Companies including Disney and CBS are investing in their own distribution platforms as they seek more direct relationships with viewers.

CBS has launched digital subscriptions for its namesake broadcast channel and for Showtime, its rival to HBO. Les Moonves, chief executive, said last week that the services offered superior economics when it comes to subscriber revenue: CBS receives three times the revenue per subscriber to its All Access digital service than it does from traditional distributors, such as Comcast, which pays network owners a fraction of their subscription fees.

Disney is gearing up to launch a pair of streaming services: one for ESPN, the sports network; and another for Disney, Marvel and Star Wars movies and TV shows, powered by its recent move to take majority ownership of BamTech, a video technology group.

Bob Iger, Disney chief executive, described BamTech this week as “another game-changing acquisition” that is as significant as the company’s past purchases of Lucasfilm, Marvel and Pixar.

Perhaps not coincidentally, he was speaking as Disney reported a rare drop in profit and revenue in its fiscal 2017, which ended in September, driven by declines in its TV and film businesses.

“We believe creating a direct-to-consumer relationship is vital to the future of our media business, and it’s our highest priority this year,” Mr. Iger told analysts on Disney’s quarterly earnings call.