Iger: Dish's Auto Hop 'Harmful' to Content Business5/30/2012 12:35 PM Eastern
Although it has remained on the sidelines in a handful of law suits to block Dish Networks' ad-skipping DVR the Auto Hop, Walt Disney Co. chairman and CEO Bob Iger said that the technology is "harmful" to the content business.
"You wouldn't hear the word ‘marvelous' coming from me" in describing the Auto Hop, Iger said at the Sanford Bernstein Strategic Decisions Conference in New York Wednesday. "I happen to believe what they are doing is harmful both to our business and to theirs. It feels like a bite the hand that feeds you approach, in my opinion."
Iger added that advertising revenue is one of the important sources of funding for content companies to create compelling programming that customers want to watch, which in turn enhances the value of subscription packages from distributors.
"By attacking [the] revenue model, one has to question in the end, what ultimately, if they're successful, that does to the ability to invest in that product?" Iger asked. "If that gets hindered or diminished in any way, what does it do to them? They don't seem to care about that."
So far, Disney has stayed in the background, absent from the suits that were filed last week in federal court in California by Fox, NBC and CBS. Dish Network filed its own pre-emptive suit in New York last week, claiming that programmers, including Disney's ABC Network, are stifling the Auto Hop's growth. ABC has said in the past that it is monitoring the situation.
Iger also shot back at distributors that complain of the high costs of sports content, adding that those that gripe about the costs neglect to see the value of that programming.
"It's an odd business that the very distributors of this great product complain about the cost of the product and they do that more than [they talk about] the value of the products to their consumers," Iger said. "Usually if you've got a distributor out there, they are extolling the virtues of what they are distributing or reselling to the customer, not complaining about how much it costs to buy it."
He added that sports networks like ESPN which provide hundreds of hours of original programming in addition to games, shouldn't be lumped together with regional sports networks.
"ESPN gets tarred a bit with the same brush that the RSNs get tarred with," Iger said. "That's really unfair. Even though there are ardent local sports teams fans, I'm one of them, that are willing to pay substantially for their favorite local team, if you look at the cost of those channels vs. the ratings they deliver and the amount of original programming they deliver, it's not even close to what ESPN delivers." He added that in some markets, ESPN has four times the primetime ratings of RSNs and delivers hundreds of more hours of live sports.
" The value is being delivered to the customer. We hear that both from the cable distributors and from advertisers, " he said.
At the same time, Disney is sensitive to distributors that struggle with rising costs.
"We're not trying to kill the Golden Goose," Iger said, adding that Disney is mindful when it increases rates not to price itself out of the market. But he added that Disney's increase have been in line with the increases in value it provides.
That means additional products, like TV Everywhere and mobile apps like WatchESPN. Iger said that Disney is launching a new app - for the Disney Channel - next week on Comcast systems which will allow authenticated Comcast subscribers to watch Disney Channel programming on mobile devices. Other apps for its ABC Family network and others are expected soon, he said.