Disney (s DIS) President and CEO Bob Iger addressed the context surrounding his company’s recent deal to take an equity stake in, and provide programming for, Hulu on his company’s quarterly earnings call yesterday. As for the earnings themselves, net income was down 46 percent, due in large part to declining theatrical and DVD sales.
Some NewTeeVee-related highlights from the transcript (via Seeking Alpha):
TV Everywhere: Regarding cable cos’ desire to link up offline and online accounts, Iger said some recent comments about authentication he made were misinterpreted. If authentication is used to provide services on top of what’s available already, he’s cool with it, but if it’s employed to block non-subscribers — “that we believe is not only anti-consumer but anti-technology, and we have some issues with that.”
YouTube v. Hulu: Iger doesn’t feel YouTube (s GOOG) has established a track record for long-form content (so he did a distribution deal for short-form only). The opportunity to have significant equity in Hulu was very attractive.
Staking a Claim: The Internet is “only going go to grow in size from a consumption perspective, and we just feel that it is really important for us to establish ourselves there as a brand or brands — ESPN, Disney, ABC — as sub-brands, the name of our shows,” said Iger. “[U]ltimately I think the monetization is going to come in a variety of ways.”
Tearing Down the Garden Walls: Iger said locking content on ABC.com ended up being incongruous with Disney’s broader distribution strategy (see above). “[I]n order to really take advantage of that medium and that platform, we had to have ABC content in more places.” But to be sure, ESPN won’t be on Hulu, and Disney Channel programming will only be there after an exclusive window on Disney.com.
Cannibalism: Iger says the audiences on iTunes (s AAPL), ABC.com, and Hulu are younger than that for primetime networks, so distribution there isn’t cannibalistic. Disney also finds that online consumers of media consume more media in general.