In the Q3 earnings call, Disney’s CEO enthused about vMVPDs, Hulu, and the up-coming 2019 service. In the process, he revealed the way the company sees its video future.
Chapter 1: Disney wants to target content, not aggregate (0:30)
Bob Iger, Disney’s CEO, thinks consumers are moving away from the big pay TV bundle toward apps:
“We don’t want to go to market with an aggregation play that replicates the multichannel environment that exists today because we feel consumers are more interested in making decisions on their own terms of what kind of packages they want.”
He doesn’t plan to aggregate all the content into a single app. He plans to target groups with apps. Here are his plans for the three apps Disney has today.
Chapter 2: How ESPN+ fits in (1:34)
ESPN+ currently aggregates a lot of minor sports, including UFC, Little League, and athletics. It also has some major sports, including some MLS soccer matches and MLB baseball games. He plans to boost the amount of content available with college sports, more UFC, and Italian Seria A soccer with Ronaldo. He wants ESPN+ to be many people’s soccer hub online.
Chapter 3: Hulu is important too (2:50)
Hulu falls under Disney’s control as part of the Fox acquisition. Mr. Iger says Hulu is very important to Disney. Perhaps one of the reasons is because it includes the vMVPD, Hulu Live. Mr. Iger was very enthusiastic about vMVPDs:
“Though the erosion of the expanded basic bundle continues, the impressive growth of these vMVPDs has steadily slowed overall sub losses.”
It will be tough to keep Comcast/NBCU committed to Hulu, but Mr. Iger must try. Hulu and Hulu Live are very important in helping consumers transition from a linear world to the app world he articulated.
Chapter 4: Disney’s 2019 service cheap, but worth it (4:46)
The family-oriented service will launch in late 2019 and will cost less than Netflix. Mr. Iger says the lower cost is justified because the content flow will be much lower than Netflix. He plans to build that content flow over time. However, he believes the service will be successful:
“We have always believed we have the brands and content to be extremely competitive and thrive alongside Netflix, Amazon, and anyone else in the market.”
And who can argue with that? Marvel, Disney, Pixar, and Star Wars are household names. Despite some confusion about exactly which movies will be available, there will be plenty of great content for people to enjoy.