![\"Disney\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2017\/08\/Disney.png\")
<\/a><\/p>\nWalt Disney Co.\u2019s Bob Iger is ready to embrace the cord cutter.<\/p>\n
Disney, the world\u2019s largest entertainment company, outlined plans Tuesday to sell some of its premiere content directly to consumers online starting next year. It\u2019ll offer live sports and animated films including \u201cToy Story 4,\u201d sidestepping partners from Netflix Inc. to pay-TV providers like Comcast Corp. and DirecTV.<\/p>\n
\u201cIf you look at Disney\u2019s 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 motion-picture theaters,\u201d Disney\u2019s chief executive officer said in an interview on Bloomberg TV. \u201cThis is an opportunity to reach the consumer directly.\u201d<\/p>\n
The need for Disney to act was underscored by the company\u2019s fiscal third-quarter financial results, which were also announced Tuesday. Sales and profit fell because of weakness in the company\u2019s big cable TV division, especially ESPN, where subscribers and ad sales shrank. Still, Iger\u2019s decision shocked investors, sending shares of both Disney and Netflix lower in late trading.<\/p>\n
Disney\u2019s 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 \u201creasonable\u201d monthly fee. In 2019, the company will launch a Disney video service, featuring live-action films, Disney Channel TV shows and Pixar movies.<\/p>\n
In the process, the Burbank, California-based company said it\u2019s ending a deal to offer its newest films online through Netflix, the video-streaming pioneer. That will stop in 2019. Consumers, Iger said, are moving rapidly online and Disney needs to move with them.<\/p>\n
Shares of Disney fell 3.8 percent to $102.92 in extended trading. Netflix, which is losing a key supplier, was down 4.6 percent to $172.95.<\/p>\n
Iger, 66, has shown a willingness make big bets in the past. To revive the company\u2019s flagging film business, he spent $15.2 billion over almost a decade buying a trove of movie ideas: Pixar Animation, Marvel Entertainment\u2019s cast of comic superheroes and Lucasfilm\u2019s \u201cStar Wars\u201d franchise.<\/p>\n
Now, he\u2019s focusing on Disney\u2019s biggest business, television, where cord cutters and cord shavers threaten two crucial sources of revenue — advertising and subscriber fees.<\/p>\n
In the third quarter ended July 1, Disney reported a rare drop in sales and profit. Earnings at the company\u2019s TV networks slumped 22 percent amid higher-costs for sports programming, as well as a drop in subscribers and weak ad sales at its flagship ESPN channel. While profit of $1.58 a share beat analysts\u2019 estimates, revenue declined slightly and missed projections.<\/p>\n
\u201cWe looked at the sub losses of 3 percent as the high end,\u201d Edward Jones analyst Robin Diedrich said in an interview. \u201cWe\u2019re not seeing the tailing off that we expected. This is continuing to happen.\u201d<\/p>\n
The immediate fallout for Netflix looks minimal, though investors may fear other Hollywood studios will move against the company and further restrict what they sell to the online service. Netflix will spend more than $6 billion on programming in 2017, much of it from other media outlets, and has a long term budget of $15.7 billion, with a significant portion dedicated to the company\u2019s own original productions.<\/p>\n
Netflix has lost content before, including pictures from Sony, Paramount, MGM and Lions Gate. Yet its subscribers have continued to grow and the company has successfully expanded its streaming service worldwide.<\/p>\n
\u201cU.S. Netflix members will have access to Disney films on the service through the end of 2019, including all new films that are shown theatrically through the end of 2018,\u201d Los Gatos, California-based Netflix said in a statement. \u201cWe continue to do business with the Walt Disney Company on many fronts, including our ongoing relationship with Marvel TV.\u201d<\/p>\n
Disney already has its toes in direct-to-consumer businesses. For two years, the company has offered Disney Life, an online video service in the U.K. featuring classic films and TV. As part of Tuesday\u2019s announcement, Iger said Disney would pay $1.58 billion to buy an additional 42 percent of BamTech, an arm of Major League Baseball that provides streaming services for everything from ball games to World Wrestling Entertainment Inc.<\/p>\n
Disney will let viewers watch what Iger called a \u201cNetflix of sports\u201d via a single ESPN app. Some will be cable customers who watch ESPN and ESPN2 over the web. Others will be monthly subscribers for just the new online sports programming. Some day, Disney could seamlessly offer all of its traditional TV channels online for a monthly fee, he said.<\/p>\n
To some degree, Disney\u2019s CEO is taking a page from other entertainment executives, such as CBS Corp.\u2019s Les Moonves and Time Warner Inc.\u2019s Jeff Bewkes, who have have launched direct-to-consumer subscription services such as CBS All Access and HBO Now. But few have the characters and sports licenses that Disney has accumulated and the potential to sell those to customers around the world.<\/p>\n
\u201cDisney has great content that crosses generations,\u201d said Trip Miller, a shareholder at Gullane Capital Partners in Memphis. \u201cThere is no doubt my grandchildren will consume Disney content that we consumed as children. They are just going to be consuming it a different way.\u201d<\/p>\n
Iger knows his plans and remarks will likely anger big distributors such as Comcast Corp.\u2019s Brian Roberts and Randall Stephenson of AT&T Inc., which owns DirecTV. He acknowledged that on Bloomberg TV Tuesday.<\/p>\n
\u201cMy guess is distributors will look at this probably more as a threat than anything else,\u201d Iger said. \u201cIt\u2019s not intended to be that. We are reacting to the marketplace.\u201d<\/p>\n
Walt Disney’s Bob Iger is ready to embrace the cord cutter.<\/p>\n","protected":false},"author":341034,"featured_media":202482,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[24],"tags":[12857,2054],"class_list":["post-223782","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-broadcasting","tag-disney","tag-netflix"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/223782"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=223782"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/223782\/revisions"}],"predecessor-version":[{"id":223784,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/223782\/revisions\/223784"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/202482"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=223782"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=223782"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=223782"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a><\/p>\nNow read:\u00a0Netflix acquires comic book company Millarworld<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"