Iger Cites Threat to Old Models As Disney Proceeds On Comcast App

"It’s no longer a TV world, it’s a media world,” said Disney CEO Robert Iger on a webcast Wednesday from the Sanford C. Bernstein conference in New York. Commenting on Disney’s announcement Wednesday that it would launch its TV Everywhere app for the Disney Channel through Comcast next week, Iger said the media world is becoming more “fragmented” and will only become more so as people consume media at home, at school, in cars and “walking down the street.” With technology enabling more avenues for consumers to view media, content companies have to determine which the most important venues are and “how can we create, or preserve, the most value,” he said. Iger said Disney’s decision to “embrace” technology rather than respond in a threatened way has “definitely worked.”

As content distribution companies vie for viewers, they're all seeking “high-quality brands,” Iger said, saying all the Disney brands -- ESPN, Disney, ABC, Pixar, Marvel, ABC Family -- are in “high demand” from digital platforms and those platforms will provide growth for the company. At the same time he acknowledged that Disney’s old business models are feeling the threat from the new distribution methods, leading the company to take a “proactive” position in “embracing technology” as an opportunity to expand business. It’s unknown how well new business models will hold up or whether they'll be as “robust” as traditional models, Iger said, noting that five years ago iPad, Zynga and Facebook weren’t part of mainstream culture. Traditional media companies -- Paramount, CBS, Time-Warner and NBC Universal, in addition to Disney -- “all have great brands and great products” that he believes will survive the evolution.

Iger said the Watch Disney mobile app that will be available to Comcast subscribers next week is “a home run,” because consumers can watch either live or on a “time-shifted basis” on a new device. Through the authentication model, cable operators still receive revenue from the service while giving consumers options, he said. The adoption rate of the first TV Everywhere app from Disney, “Watch ESPN,” has been “great,” he said, and the company will continue to roll out apps including one for ABC Family “and so on,” he said. The model enables Disney to “generate more revenue,” he noted. “We got paid by Comcast for TV Plus capability,” he said.

In response to a question about Disney’s gaming business, Iger said the division will continue to be relatively small compared with its other businesses but is still on target for profitability in 2013. “It’s about time because we've invested a fair amount,” he said, adding that the company made “mistakes” on the gaming side by focusing on consoles. The gaming area has “changed radically” with the advent of social and mobile games and the company will make a “modest investment” on the console, social and mobile fronts that will be rolled out over the next couple of years. “It’s a space we should be in,” he added, “because the brands can do well” there, he said. In game offerings, the company is looking at a mix of self-published and licensed content, he said.

Disney is also building out its website to increase traffic and “get close to our customer,” Iger said. The site will be geared toward marketing and “entertaining,” he said. Iger spoke of opportunities to aggregate the branded businesses under one destination “some with an eye toward direct sales,” he said.