Disney Chief: ESPN Is A-OK

Iger Says Sub Losses at Net Lower Than Reported
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Walt Disney Co. chief Bob Iger took a chunk of time at the media giant’s earnings call Tuesday to address reports that have claimed its ESPN sports network has been struggling under the weight of heavy subscriber losses, adding that the network is performing well.

Iger came out swinging in defense of ESPN, adding that Disney is confident in its performance and that while it has had some subscriber losses, 80% of them are due to an overall decline in the number of multichannel households across the country. He added that actual subscriber losses were lower than what has been released in some reports.

Last month, the Wall Street Journal reported that ESPN was undergoing some serious belt-tightening in order to reduce costs brought on by a sharp decline in subscribers. According to the Journal, ratings measurement giant Nielsen has estimated that ESPN has lost about 3.2 milion subscibers in little more than one year.

Iger admitted that ESPN uses Nielsen subscriber numbers but “they don't necessarily track the number of subs that we get paid on.”

“The numbers that have recently been in the press which are Nielsen numbers were higher in terms of sub losses than those that we are seeing,” Iger continued. “But we're not at this point ready to give specifics in terms of what those numbers are.”

Iger also tried to calm any fears that the Worldwide Sports Leader would go direct to consumer anytime soon. Late last month Iger told CNBC that going direct-to-consumer was “inevitable” for ESPN, but not for at least five years.

Iger stressed that the multichannel video model is still the best way to deliver programming, adding that 83% of multichannel video subscribers watched ESPN in the first quarter.

“When we look at the universe we don't really see dramatic declines over the next five years or so and therefore we are not taking what I would call radical steps to move our products into over-the-top businesses,” Iger said. “We don’t think right now that is necessarily the greatest opportunity. We just don’t think it's necessary.”

But Iger acknowledged that there is value in being on new emerging platforms.

“They want ABC, they want Disney Channel, they want ESPN,” Iger said of those new platforms. “There isn't one that has talked about launching without coming to us, suggesting a desire to have us. We are going to take advantage of those opportunities and at the right price under the right circumstances, license our linear channels to those platforms.”

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