http://www.broadcastingcable.com/news/currency/disney-coo-staggs-backs-pay-tv-bundle/144078
Disney COO Staggs Backs Pay TV Bundle
The Walt Disney Co., which helped to send media stocks into a tailspin by
acknowledging a small drop in pay TV subscribers and slower profit growth at
ESPN, stressed it is working to preserve and enhance the cable bundle.
Disney’s new COO Tom Staggs, speaking at the Bank of America Merrill Lynch 2015
Media, Communications & Entertainment Conference Thursday, said that while
other media companies are experimenting with over-the-top and
direct-to-consumer models, he doesn’t see Disney going over the top for the
foreseeable future.
Staggs said he thought the media stock selloff was an overreaction to
conditions in the TV marketplace. The selloff started after Disney’s latest
earnings call, as CEO Bob Iger’s remark that ESPN had lost some subscribers
raised concerns about the growth in distribution revenues.
“We continue to believe in the value and the appeal of the multichannel bundle.
That value and appeal is going to continue for a long time,” Staggs said. “We
also know that as the market evolves and as these platforms have access to more
technologies, there will continue to be opportunities to improve the value
proposition of the bundle in everything from user interface to navigations, to
search, access to programming and it’s incumbent upon us and the distributors
to make sure we’re taking advantage of opportunities to improve the user
experience.”
He added that the bundle shouldn’t be viewed as a static product. “It’s going
to continue to evolve and we’re going to continue to reinforce the value of
that bundle over time.”
Staggs also said he was confident that Disney’s programming services—including
ESPN—would continue to thrive. “They’re extremely valuable in the context of
the existing platforms, but they’re also very attractive to any new entrants.
And as the market evolves I think we’re going to continue to see new entrants,”
he said. “We’re going to continue to see demand for our programming services
and they will continue to be an important part of those services actually being
successful in their launches. You look at the strength of our brands and our
programming and we feel very good about where we sit.”
ESPN in particular is valuable to consumers and distributors with its broad
collection of sports rights, which drive live viewing.
ESPN has also built a multiplatform brand, he said. Last weekend, ESPN aired 48
college football games, most of which were only available through streaming on
Watch ESPN. Viewership on ESPN’s digital platforms was up 60% for the weekend
from a year ago and the number of devices accessing Watch ESPN was up more than
50%. Staggs added that multiplatform viewers also are among the heaviest users
of linear TV. “People sometimes think of this as more of a zero sum game than
appropriate,” he said.
Staggs said Disney would have a fluid approach to SVOD, with some content best
served by remaining with in the current ecosystem and other content being
monetized on new platforms.
“The growth of the SVOD players underscores the fact that high-quality
programming is more in demand than ever and our ability to monetize our
programming is greater than ever,” he said.
Asked about the possibility of Disney going over the top with its programming
brands, Stagg said “in the foreseeable future I don’t see over the top being an
outcome that’s going to happen.” He added that “to the extent that there’s
opportunities to broaden reach through going over the top either in concert
with the existing model or because the model shift, I feel just as good about
the brands and programs we have to make sure that we can make that pivot if the
need is there. I don’t see that soon.”
