Disney’s Bob Iger talks digital strategy

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As the Fox network joined its broadcast brethern in blocking Google TV, ABC’s parent company, Walt Disney Co., faced new questions about the status its network’s talks with the Silicon Valley tech giant.

Chief Executive Bob Iger refused to discuss Google TV during the company’s fourth-quarter earnings call Thursday -- ‘we’ve not announced a deal with them at this point and I’m not going to say anything more specific about them.’ But he did talk at length about how Disney evaluates new services that bypass cable, satellite and telecommunications services to deliver video in the home.

Disney is eager to take advantage of new technologies to deliver entertainment to consumers -- indeed, it has been in the vanguard of such digital offerings through deals struck with Apple Inc. Iger said it’s important to make ‘legitimate product’ available to consumers to combat piracy as well as generate incremental revenue.

‘This is something that we’re looking at more and more across our businesses,’ Iger said on the call with analysts. ‘It’s essentially saying to consumers that they should be able to watch our product on the best available screen to them.’

Iger said he is keenly aware of discussions that advances in digital technology would accelerate cord-cutting: the feared moment when cable, satellite and telecom subscribers will cancel their $70-a-month services and get TV shows and movies delivered more cheaply (or for free) via the Internet.

That anxiety only heightened this week, when the Wall Street Journal reported that traditional TV distributors lost 108,000 subscribers in the third quarter. This followed on the heels of the industry’s first-ever decline in the second quarter, which market researcher SNL Kagan estimated at over 200,000 customers.

Iger attributed the drop in subscribers to tough economic times -- and the end of some discounting -- not to cord-cutting. Nonetheless, he said Disney would be judicious in the kinds of deals it strikes with emerging platforms.

‘I still think that it’s in the best interest of the company to see to it that the multichannel
business remain robust, continues to flourish,’ Iger said. ‘Because obviously it creates so much value for us ... but we feel that we have to very carefully balance that business with our interests as a company to grow revenue on new platforms.’

-- Dawn C. Chmielewski

It’s a title-driven business, no question about it, and I mentioned Toy Story 3 which was out in the
marketplace now, and if ever there is a title that would do well, it would be Toy Story 3, particularly
in the sell-through side because it’s a title that just makes a lot of sense for people who are going to
let their kids watch it multiple times to own versus rent, for instance. And it will do quite well. I’m not
going to make predictions as to what it will do, but if you were to look at the numbers for Toy Story
3, which will be extremely strong, versus what films did just three, four, five years ago, you would
be sobered by those numbers. That said, there’s a larger percentage of people with each title or
good title that’s buying blu-ray and in our case, well, calling it multiple copies and we’re out in the
marketplace with Toy Story 3 with a premium product that is a blu-ray dvd, a standard def DVD and
a streamable file or a streamable code. And that’s doing quite well. And actually represents about
80% of blu-ray sales, meaning of the roughly 25% of units, Toy Story 3 that are blu-ray with good
pricing, about 80% of those are buying this multipacket. So we have seen some pricing leverage or
improvement because we’re out there offering more value to consumers.