Chief Executive Bob Iger has stated that Walt Disney has significantly reduced its investment in programming for traditional television networks as part of its strategy to maximise audiences and profit in the age of streaming TV.
When Bob Iger announced his retirement and rejoined Disney as CEO in November 2022, he said he took a broad view of traditional media.
In his conclusion, he said that traditional networks like ABC continue to be valuable marketing tools that help connect with older viewers who aren’t watching shows like “Abbott Elementary” on Disney’s streaming services.
However, at MoffettNathanson’s 2024 Media, Internet, and Communications Conference in New York, Bob Iger stated that the company has cut “pretty dramatically our investment in content specifically aimed at those traditional networks.”
“We feel comfortable with our hands right now, because we’re using those networks efficiently and effectively,” he said.
According to Bob Iger, shows like “Abbott” and “Grey’s Anatomy” migrate fast to Disney’s Hulu streaming platform, where they draw a younger audience.
The CEO continued, “Disney is able to amortise costs across platforms thanks to this strategy.”
Dana Walden, one executive, is in charge of both streaming and traditional entertainment networks.
“We’re basically aggregating a greater audience, and we’re amortising costs and we’re using the marketing of the traditional network, really, to help in some cases. We’re doing that across the board, Disney Channel, ABC, National Geographic, and it’s working,” Bob Iger said further, while adding that he anticipated Disney’s theme park business to continue growing, albeit maybe not as quickly as it had in previous years.
“We’ve had double-digit revenue growth in that business for quite some time, and that’s extraordinary. But I think we’re being realistic, too, in that delivering double-digit revenue growth…well into the future is not necessarily that achievable,” he said.
Meanwhile, Disney/ESPN, Fox Corporation and Warner Brothers Discovery have come together to launch a sports streaming platform called “Venu Sports.”
The partnership, unveiled in February 2024, aims to position Venu Sports as a way to reach consumers who don’t subscribe to pay TV. The platform, all set for its debut by the year-end, will be headed by Pete Distad, who worked for a decade at Apple and most recently was responsible for Apple TV+ business, operations and global distribution.
Venu will combine ESPN+ with the three companies’ linear TV networks that carry sports programming (ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNews, Fox, FS1, FS2, Big Ten Network, TNT, TBS and truTV). The joint venture has also launched a new website at venu.com.
“The site’s terms of service indicate that it’s operated by Rookie Enterprises, LLC, a subsidiary of Fox Corp. In announcing the new name, the three companies also noted that the JV is still pending the finalisation of definitive agreements amongst the parties,” reported Variety.
However, the joint venture is going to face a stern test in the form of a United States Justice Department scrutiny, as the Joe Biden government is going to review the three-way venture to look at anticompetitive implications, with two leading congressional Democrats expressing concerns that the JV may “result in higher prices for consumers and less fair licencing terms for upstream sports leagues and downstream video distributors.”
Streaming TV provider Fubo has also filed a federal lawsuit seeking to block the JV service’s launch, alleging the venture violates antitrust laws.
“On May 2, Fubo, DirecTV, Dish Network, Newsmax and others sent a letter to members of Congress calling for hearings on the state of competition in the pay-TV market, specifically calling out the Disney-Fox-WBD joint venture as raising serious competition concerns that call for Congress’s immediate oversight,” Variety concluded.