So now ESPN is going to be sold directly to consumers?

[luvgoing2disney]

I guess all this park penny-pinching stuff and costs over-run for the new park is getting serious. (As if it wasn't already!)



Disney CEO Bob Iger says Disney needs to improve on the digital front, and that selling ESPN direct-to-consumer is on table.

Speaking at the Deutsche Bank Media, Internet & Telecom Conference on Tuesday, Iger said that "rights" were not the issue with selling ESPN directly, but mentioned that price was a sticking point, according to the Orange County Register.

Iger also acknowledged that ESPN's digital experience needed to get better.

As of December, ESPN had lost about 7 million subscribers in the previous two years. That meansESPN left an estimated $1.3 billion in subscriber revenue on the table in 2015, compared with what it would have made with steady cable company growth.

Last month, ESPN president John Skipper admitted his company had been hurt by people ditching cable, and that it was in talks to expand its presence in online streaming service

 

[erionm]

When he said 'selling ESPN direct-to-consumer', he means creating a ESPN subscription product that a viewer could purchase without needing to have cable.

HBO Now is one example. You can purchase a subscription to HBO Now without needing to have any cable service. Showtime also has a standalone streaming product you can purchase without having cable.

 

[luvgoing2disney]

Oops, my bad. I guess with all the other pricing / fees increases I read what I "anticipated" it to be. Having re-read it I realize I jumped the gun.

 

[larryz]

But don't discount the possibility of spinning off the parks and resorts... those aren't "core businesses" for a TV/movie/media conglomerate corporation. And it worked for InBev Anheuser-Busch...

 

[cabanafrau]

But don't discount the possibility of spinning off the parks and resorts... those aren't "core businesses" for a TV/movie/media conglomerate corporation. And it worked for InBev Anheuser-Busch...

This is what I fully expect the future to be - for WDW. I believe they will hang onto DLR, at least longer than they will WDW.

 

[Mikie]

But don't discount the possibility of spinning off the parks and resorts... those aren't "core businesses" for a TV/movie/media conglomerate corporation. And it worked for InBev Anheuser-Busch...

Did A-B spin off or sell the parks? I had thought they were at least trying to sell initially, because they weren't running a profit. I recall they weren't getting buyers for a long time, but I don't remember if it ended as a sale or a spin-off. Getting rid of a poor performing arm is very different from spinning off a strong division so that it stays healthy and isn't cannibalized by a failing sports division.

 

[davper]

The headline got me all excited. I saw my cable bill going down because ABC wouldn't have to extort the cable companies into forcing consumers to pay for it anymore.

 

[rteetz]

I'm going to change the title so people aren't confused.

 

[EricInPA]

Did A-B spin off or sell the parks? I had thought they were at least trying to sell initially, because they weren't running a profit. I recall they weren't getting buyers for a long time, but I don't remember if it ended as a sale or a spin-off. Getting rid of a poor performing arm is very different from spinning off a strong division so that it stays healthy and isn't cannibalized by a failing sports division.

InBev sold the 10 A-B parks for ~$2B dollars to pay for their takeover of the A-B company (which cost them $52B). It would seem silly for Disney to sell off assets from a division with almost $1B in operating income per quarter.

 

[Tinkerdreams]

I think this is going to be the wave of the future. Many people are dropping cable - I did this 5 years ago since the cost was unbelievably expensive for the number of channels I actually watched - with many of them that are over the air anyway.

People have wanted a-la-carte for years and now they will get it with stand alone streaming services - HBO, Showtime, Starz, etc. I'm actually thrilled this is happening since I only want to pay for what channels I enjoy watching.

 

[larryz]

Did A-B spin off or sell the parks? I had thought they were at least trying to sell initially, because they weren't running a profit. I recall they weren't getting buyers for a long time, but I don't remember if it ended as a sale or a spin-off. Getting rid of a poor performing arm is very different from spinning off a strong division so that it stays healthy and isn't cannibalized by a failing sports division.

I think Blackstone Group bought them, and then spun them off as SeaWorld Entertainment.

And a "strong division" doesn't go thru the cost-saving mechanics that Disney Parks is resorting to. (sorry -- I couldn't resist the pun)

 

[OKW Lover]

But don't discount the possibility of spinning off the parks and resorts... those aren't "core businesses" for a TV/movie/media conglomerate corporation. And it worked for InBev Anheuser-Busch...

Core business? Accounting for about 1/3rd of the company isn't a "core business"?

 

[larryz]

Core business? Accounting for about 1/3rd of the company isn't a "core business"?

Remember where the CEO comes from...

 

[Mackenzie Click-Mickelson]

Amazon Prime now has where you can add "add on subscriptions" like Showtime, Starz, etc. I def. think there is a growing trend of people who are getting rid of cable altogether though I do think part of that has to do with where you live.

In my area we have Time Warner Cable, Consolidated Communications (used to be SureWest), Dish Network, DirectTV (now part of AT&T), U-verse and Google Fiber. Granted they are different products but now you've got choices; it used to be that for the most part Time Warner was the only guy in town (due to an agreement).

The big boys now are U-Verse and Google Fiber both with 1,000 mps internet now. So you're still going to have people, like me who want cable, but with fast internet speeds you've open the door to having people ditch the cable and watch all that they want online without many issues.

 

[mcjaco]

ESPN screwed themselves in their last deal with Comcast/Xfinity. Iger and Disney are trying to figure out a way to right that ship, as viewership has dropped significantly.

 

[umichigan10]

I think it's difficult to sell your product when you claim to be the 'world wide leader' and your content has suffered over the years. My opinion

 

[Grand Admiral]

As someone in the ATL area with Comcast, let me tell you, data caps suck. We don't download a huge amount of stuff, but just watching some Netflix and Amazon Prime puts us near our data cap every month. If I download a computer game or two, we can go over pretty easily.

However, having Disney on the side of streaming providers would be a big help in fighting data caps. Disney is big enough to stand up to Comcast.

 

[crazy4wdw]

Disney CEO: ESPN Direct Is on the Table

Although analysts are divided into two camps as it relates to The Walt Disney Company's outlook, the disagreement tends to hinge on one critical issue: pay TV. Bears are worried about the company's dependence on the large-package pay-TV ecosystem for its operating income; last fiscal year, the company's media networks division provided 53% of all operating income. But, the bears argue, pay TV is under strain from cord-cutters and cord slimmers.

Bulls, on the other hand, feel the dangers from the cord-cutting and cord-slimming phenomena are overstated. Additionally, these analysts argue, Disney is a multifaceted entertainment conglomerate with film studios, theme parks, and consumer products. Supporting the bullish thesis are the huge successes of recent films "Star Wars: The Force Awakens" and "Zootopia." However, last fiscal year, the film division was only responsible for 13% of operating income, meaning the company would have to tremendously increase its production of hit movies for that division to generate anywhere close to what comes out of Disney's media networks division.

The crown jewel of Disney's media networks division is sports-focused network ESPN. Until recently, Disney CEO Bob Iger and ESPN President John Skipper were steadfast in their refusal to consider a direct-to-consumer ESPN service like Time Warner's HBO Now. But now, it seems Iger is now reversing his stance.

Speaking at Deutsche Bank's Media, Internet and Telecom Conference, Iger stated, "Some form of direct-to-consumer proposition" is under consideration. Going on, the CEO elaborated that price could be the sticking point.

http://www.fool.com/investing/general/2016/03/11/disney-ceo-espn-direct-is-on-the-table.aspx

 

[TexasKiwiPrincess]

We cut the cable cord in 2008 and the only programming I've missed is the ability to watch some live sporting events.
ESPN as a stand alone product would be very tempting.

 

[lockedoutlogic]

I think it's difficult to sell your product when you claim to be the 'world wide leader' and your content has suffered over the years. My opinion

The elephant in the room