Disney might be the most successful company in Hollywood right now, but BTIG analyst Rich Greenfield thinks that the company’s cable TV division, which still uses bundle packages, will soon be in big trouble.
Greenfield discussed his thoughts about Disney and the future of media with TheWrap’s CEO and editor in chief Sharon Waxman at TheGrill at The Montage in Beverly Hills on Monday. Greenfield talked about how media is constantly changing at a breakneck pace, as he witnessed firsthand when he saw his daughter watching “oddly satisfying” videos on YouTube.
“There’s just a lot to do, and that competition for your time is leading to pressure on Disney’s most profitable business, their cable network division,” he said.
Granted, with the continued interest in live sports, Disney-owned ESPN will still be a profitable network, but Greenfield doesn’t think that it will be a growth business as it is tied to other networks like ABC, and tune-in TV will have less of a hold on consumers as more and more entertainment options become available.
“The problem is, the minute you’re bored — and it doesn’t matter if you’re watching ‘Empire’ or ‘Monday Night Football’ — there’s an infinite number of things you can do now. Hollywood has made an incredible amount of great content, it was just hard to access. Now there’s just an incredible array of great content, but it takes away from live TV and its advertising. And if you’re not watching stuff from these big bundles, why are you going to pay 80-90 bucks for it?”
Disney might be recognizing this, which is why it is rolling out its own streaming service. Greenfield thinks this is the right move, but thinks that in order for it to be successful, there’s something Disney needs to keep in mind.
“If Disney just puts on stuff from its movie collection or from ABC and Disney Channel, it’s not going to maximize its potential,” Greenfield said. “It needs to have something exclusive.”
And when it comes to exclusive content, Greenfield believes that Apple will soon have an advantage in that department. He thinks that Apple’s decision to produce “Carpool Karaoke” isn’t exactly a “House of Cards” or “Game of Thrones,” but given time and Apple’s immense financial resources, he believes Apple will soon have a potent original content stable to rope in subscribers.
“Of everything that’s happened this year, I think the single biggest thing that’s change is Apple throwing its hat into the ring. Netflix has come far by spending money on content and hiring the right people. If you’re Apple, money’s not the problem. So go out, find the right talent, and build.”