Iger: Show Me a Model

4/04/2009 2:00 AM Eastern

The Walt Disney Co. CEO Robert Iger told the cable industry in a roundabout way last week that it must find an online model that works sufficiently for both programmers and distributors, appearing to dismiss “TV Everywhere,” a subscription-model proposal made earlier this year by Time Warner chairman and CEO Jeff Bewkes.

In his keynote speech at the opening general session of The Cable Show ’09 here last Thursday, Iger praised cable, but also warned that nitpicking over online video could be devastating to the industry.

“Let me state the obvious: Cable television is vitally important to our company,” Iger said. “It provides us with a crucial connection with consumers. And it is a critical creative engine that drives value across a number of our businesses and across markets and territories around the world.”

But he added that the prevalence of online video cannot be ignored.

The biggest bone of contention with operators has been programmers allowing viewers to watch programming for free on the Internet, while still asking cable operators to pay a license fee for the same content. While several potential financial models have been bandied about, some MSOs have warmed to Bewkes’s proposal that cable operators charge a bit extra to allow their customers to access video on the Web. While that has its own problems, some have seen it as at least a step in the right direction.

But in his keynote speech, Iger seemed to set the tone for the online debate, and it doesn’t appear to be the Bewkes model (which the Time Warner chief is expected to discuss further at an afternoon session here today).

“Preventing people from watching any shows online, unless they subscribe to some multichannel service, could be viewed as both anti-consumer and anti-technology, and would be something we would find difficult to embrace,” Iger said.

Disney, the first major programmer to make its content available on Apple’s iTunes Store and the first to stream its content on the Internet, views online video in two ways, he said: As a brand extension and as a way to expand its audience. At the same time, the media giant also wanted to challenge the status quo.

“Businesses not willing to challenge the status quo often find themselves marginalized or passed by when new competitors enter the market, or new business models emerge,” Iger said. “At Disney, we must always challenge the status quo.”

And online video viewers aren’t necessarily the threat to cable they appear to be. According to Iger, people who stream video frequently are actually more apt to watch television, buy HDTV sets and subscribe to digital and premium services.

Iger said he was open to the “anywhere, anytime, any device” concept of making content available over multiple devices, including the computer, but said that authentication was key to the strategy.

“With authentication in place, streaming full networks online would be an interesting and potentially compelling feature for consumers, and we are certainly open to exploring that possibility,” Iger said.

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