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If there was any doubt as to how Disney (NYSE: DIS) CEO Bob Iger sees the changing TV world, it became abundantly clear in the closing hours of Disney’s investors conference on Thursday in Anaheim.
In short, for all the emphasis he puts on the centrality of digital platforms in Disney’s plans, it’s going to take analog-era business models to move beyond small, experimental bets.
After a day of presentations from the executive overseers of every Disney division, Iger himself returned to the stage late in the day to offer his own thoughts specifically on the subject of digital distribution for TV programming. Top of mind was authentication, and not only because earlier in the day Disney and Verizon disclosed a new affiliate agreement that will put a range of ESPN-branded channels online for FiOS subscribers.
Iger echoed sentiments expressed earlier in the day by ESPN president George Bodenheimer, who characterized a previous affiliate agreement deal signed last year with Time Warner Cable (NYSE: TWC) as the “template” going forward.
“Getting that deal signed set some precedent on upcoming deals with the big distributors in our future,” said Iger, who credited the cable operator for paying a sum that he felt recognized the full value of the many channels packaged in Disney’s bundle.
While analysts in the conference closing hour of Q&A peppered him with questions about Hulu, Iger seemed more interested in talking about a market entrant that doesn’t even exist yet. He returned again and again to online MVPDs (multichannel video programming distributors), which for now is a purely hypothetical venture that companies like Microsoft (NSDQ: MSFT) have been rumored to be launching bundles of channels. “There are a numer of entities out there that are kind of kicking tires,” said Iger, who didn’t specify the auspices of such ventures.
As for Hulu, Iger refused to comment on reports of behind-the-scenes conflicts that could be destabilizing the venture in which Disney has a stake. If anything he sought to minimize the importance of Hulu in Disney’s portfolio. “It’s not an anchor of the overall digital strategy,” he said. “It’s part of it, and it remains that way.”
He wasn’t any kinder to Netflix (NSDQ: NFLX), which like Hulu he seemed to place more value in the education it gave about the fickle nature of digital distribution than the incremental financial return. To Iger, they are of secondary importance.
“What you’ll ultimately see is multiple ways the product enters the marketplace after a certain period of time on third-party platforms and also on company-owned platforms,” he said, identifying ABC.com as an example of company-owned platform.
Again, Iger came back to authentication as the dividing line for consumers. “There will be a difference in window between an authenticated consumer and what a non- authenticated consumer gets. if you are a sub to a multichannel service that gets Disney channel, you will get access in a more aggressive window than if you didn’t have access to it.”