DISNEY PLANS LIFE WITHOUT PARTNERS
Group will sell content directly to online consumers from next year
WALT Disney Co’s Bob Iger is ready to embrace the cord cutter. Disney outlined plans on Tuesday to sell some of its premiere content directly to consumers online starting next year.
It will offer live sports and animated films including “Toy Story 4,” sidestepping partners from Netflix Inc to pay-TV providers like Comcast Corp and DirecTV.
“If you look at Disney’s businesses, except for the theme parks, virtually all of the businesses touch consumers through third parties, everything from big box retailers to the owners of motionpicture theaters,” said Disney’s chief executive officer Bob Iger.
The need for Disney to act was underscored by the company’s fiscal third-quarter financial results, which were also announced on Tuesday.
Sales and profit fell because of weakness in the company’s big cable TV division, especially ESPN, where subscribers and ad sales shrank.
Disney’s plans include a new online ESPN service next year that would broadcast more than 10,000 live sporting events, including major league baseball, hockey, soccer and tennis for what Iger called a “reasonable” monthly fee.
In 2019, the firm will launch a Disney video service, featuring live-action films, Disney Channel TV shows and Pixar movies.
In the process, the company said it’s ending a deal to offer its newest films online through Netflix. That will stop in 2019. Consumers, Iger said, are moving rapidly online and Disney needs to move with them.
Now, he’s focusing on Disney’s biggest business, television, where cord cutters and cord shavers threaten two crucial sources of revenue — advertising and subscriber fees.
In the third quarter ended July 1, Disney reported a rare drop in sales and profit. Earnings at the firm’s TV networks fell 22 per cent amid higher-costs for sports programming, as well as a drop in subscribers and weak ad sales at its ESPN channel. Bloomberg