Report: Iger Says ESPN Could Go Direct to Consumer

Suggests HBO Now-Like Service Would Take at Least Five Years
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Walt Disney Co. chairman and CEO Bob Iger told CNBC Monday that its flagship sports channel ESPN could eventually be sold direct to consumers like a growing number of channels, but that it wouldn’t happen in the next five years.

Iger told CNBC’s “Squawk Box” that ESPN could at some point bypass distributors like Home Box Office’s direct-to-consumer HBO Now offering, but said that ESPN would look for much deeper penetration into the marketplace.

“Five years out, I don’t think you see significant change,” Iger told CNBC’s Squawk Box. “I think eventually ESPN becomes a business that is sold directly to the consumers, where there is an engagement in that ESPN will know who their consumers are, will use that info to customize their product, enable personalization to essentially engage in a much more effective way and also to offer advertisers more value as well. That’s longer term. I think there is an inevitability to that, but I don’t think it is right around the corner.”

HBO launched HBO Now in April  and initially targeted the 10 million or so broadband-only households that don’t subscribe to a pay TV service. ESPN is available to about 93 million households through its traditional carriage arrangements with telco, cable and satellite TV service providers.

“Disney [Channel] is another brand and product that could be sold directly to the customer,” Iger told Squawk Box.

Iger wouldn’t speculate on how a standalone ESPN offering would be priced, although some analysts have said it would cost between $21 and $28 per month.

“We’ve done some research, but it’s all conjecture at this point. Until the product is really taken out, we really don’t know,” Iger said.

Iger added that ESPN has enjoyed strong viewership, especially for its live sports, and that ratings this year have outpaced those of 2013. He noted that 2014 was a bit of an anomaly because of the World Cup soccer championship.

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