Walt Disney Co. CEO Bob Iger signaled Thursday that his company is planning to become more aggressive in developing its own digital streaming platforms.
Iger was asked during a conference call with investors following the release of Disney’s fourth-quarter earnings report about DisneyLife, the subscription video on demand app the company launched in the U.K. in October. The digital service, featuring Disney content, costs $15 a month and is expected to expand into continental Europe in 2016. Iger indicated that the product is a trial balloon and that the company will look to expand its direct-to-consumer digital business in the near future.
“We wanted to test this in a market where there was strong brand affinity,” Iger said of DisneyLife, adding that existing content deals in the U.K. made it easier to populate the service with Disney content there. “When you look at technology today … the app experience is, I’ll call it a 3D experience versus the 2D experience that linear television offers.”
Iger added that Disney is “very interested in taking content directly to consumers as a company.” The company’s customers, he said “typically buy through third parties. There’s nothing wrong with that, by the way. We do great business with movie theater chains and big-box retailers and multichannel distributors. But given the way the world is and what technology makes available … we have an opportunity to reach our consumers directly in a way that our competitors can’t come close to doing. So it is a competitive advantage and it is an opportunity that technology is providing us. And it’s something ultimately that you’ll see more of.”
Iger’s comments came as as multiple legacy and younger media companies have ventured into the subscription video on demand business in recent years. HBO, Showtime and YouTube have all launched subscription services this year. CBS announced Monday that it would develop a new “Star Trek” television series for its CBS All Access subscription service.
The Disney chief did not back down from comments made earlier this year about cord cutting and subscriber loss at ESPN — comments that sparked stock-price declines for Disney and several other media companies.
“There’s nothing that I would either retract or in anyway change,” Iger said, adding that what the company did was update guidance given in 2014 about ESPN subscription fees. “We also decided to be candid, I think maybe refreshingly so, about what the industry was experiencing in terms of sub losses during roughly the last period. We feel that there certainly should be no reason to panic over comments like that.”
Iger also said that he expects Disney’s new Shanghai theme park to open in the early part of 2016 and for an opening date to be announced before the end of 2015