Iger: New Media Can Complement Old

Says Online Distribution Can Help All Audiences Grow

By Mike Farrell -- Multichannel News, 3/12/2008 1:23:00 PM

New York – Disney CEO Robert Iger touted the entertainment giant’s aggressive stance on the Web, but added that online distribution can actually enhance the value of more traditional media outlets like television and movie theaters.

Disney was the first major entertainment company to make its content available on Apple Inc.’s iTunes and has been aggressive in buying Web sites and in the social networking space. And he added that he believes broadband-enabled computers will become an increasingly important content delivery tool, especially for kids.

Iger said that one thing that social media has taught him is that it isn’t just for so-called Generation X or Generation Y consumers.

“It’s about kids; kids are using their broadband-enabled computers for entertainment much more than the generations before them,” Iger said. “We believe the broadband-enabled computer is going to be a primary source of entertainment for kids in the years ahead. It’s just as important to them as the TV set.”

Iger admitted that broadband delivered content has been a small part of Disney’s overall business – he estimated that in 18 months users have purchased between 40 million and 50 million episodes of Disney television shows from iTunes and about 4 million movies.

This year Disney expects total online revenue to rise to about $1 billion from about $750 million in fiscal 2007. Disney reported total revenue of $35.5 billion in fiscal 2007.

While Iger doesn’t see consumers scrapping their television sets for computers in the near term, he said that Internet distribution is an important part of the mix.

“Over the long run there will be some shift, particularly in filmed entertainment” Iger said. “It won’t shift completely – you won’t see the DVD business go away—it will stay vital for a long time. But electronic delivery will grow.”

Iger said that television, especially with the advent of HDTV, is continuing to hold its own and disputed its characterization as old media.

“Television is still a very powerful medium,” Iger said. “When you watch a high-def version of High School Musical on a flat-panel TV that you just bought for much less than you ever thought you would have to pay for it at Wal-Mart, that’s not an old media experience.”

“More mature platforms can still generate a lot of value, including the big-screen movie experience in the theater,” he added. “That value actually grows because of new media, because what you do is you introduce it to the world on a traditional platform and you use new media to reach more people and create more dimensions.”