Disney CEO Says Joint Venture Sports Streamer is Aimed at Cord-Nevers, Is Not Disruptive to Cable Bundle
Speaking at a technology and media conference this week, Disney CEO Bob Iger repeated an argument used by Fox chief Lachlan Murdoch.
The heads of Disney, Fox, and (presumably) Warner Bros. Discovery seem to have gotten their talking points aligned this week. CEOs of Fox and now Disney have both spoken at the 2024 Morgan Stanley Technology, Media and Telecom conference about the new joint venture streaming platform the three companies are trying to launch by this fall, and both had very similar answers when asked about the streamer’s potential to disrupt the traditional pay-TV industry.
- Disney CEO Bob Iger expressed doubts about cable’s ability to win back cord-cutters, and its potential to lure cord-nevers.
- Fox head Lachlan Murdoch said earlier this week the streamer could attract as many as 60 million households.
- These words are likely aimed at current cable distribution partners and government officials who are wary of the streamer.
Disney chief executive Bob Iger took the stage at the conference to offer some updates on Disney’s streaming efforts, including the JV platform. During the event, he argued that the streamer was targeted at viewers who had left traditional cable and satellite behind for good, and thought there was a large percentage of these customers who still wanted to watch sports usually found on cable.
“You’ve got a lot of people, young people who have not subscribed to the multichannel fat bundle,” Iger said. “And you have a lot of people that used to be subscribers that lapsed. We want them in. They want to watch sports.”
Iger also expressed skepticism at the argument that the new, skinnier sports channel bundle available in the JV streamer would somehow dissuade cord-cutters and cord-nevers away from trying cable and satellite. In his view, that particular ship has already sailed for traditional TV distributors.
“I know a lot of folks claim that it was disruptive to the bundle,” the CEO said. “I’m not sure, by the way, the bundle was ever going to get some of those consumers back or the generation that our kids are part of, get them into it. This is a way to do that.”
Iger was using essentially the same argument put forward by Fox CEO Lachlan Murdoch at the same conference on Monday. Murdoch said that the new combined streamer could have an addressable market of up to 60 million customers who have either departed from cable or never had it in the first place.
Who Are Iger, Murdoch’s Assertions Intended For?
The average TV viewer is much more interested in things like the projected cost of the JV streaming service than its total addressable market. But executives at Disney, Fox, and WBD have more than just audiences to worry about when gauging the response to their new streaming platform.
For one thing, each company still has a bundle of cable channels that it wants traditional cable and satellite distributors to carry. That means they have to soothe justifiable fears that the JV streamer will pull large numbers of customers away from their current pay-TV plans, especially since it’s highly unlikely that Disney, Fox, or WBD is planning to stop asking for carriage fee increases from those distributors with each new contract negotiation. If the companies have any hope of getting more money for their cable channels — while also offering viewers a cheaper way to watch them via the JV streamer — Disney, Fox, and WBD have to be very careful about what they say about the service’s relation to cable and satellite providers now. By positioning the service as a product aimed at people already outside of the traditional TV sphere, and unlikely to ever join it, the execs are looking to cement the narrative that the JV will have a minimal impact on the cable and satellite business.
Those same executives also want to avoid upsetting their live TV streaming partners, but they’re already too late in one instance. Fubo has filed an anti-trust lawsuit to stop the JV platform in its tracks, in a fight the company’s CEO David Gandler has called a “duel to the death.” Iger and Murdoch’s argument that these companies were never going to win large numbers of customers from the JV streamer’s target audience is likely meant to keep other cable and streaming companies from joining Fubo’s efforts to stop the joint platform through legal means.
Federal regulators are likely listening to CEOs’ words, as well. The Department of Justice has promised to review the joint venture streamer for antitrust violations, and these comments from Iger and Murdoch could be intended to let their friends on Capitol Hill know they don’t want to completely upset the pay-TV apple cart, they just want to give an untapped audience more choices.
Traditional cable providers do have reason to be somewhat concerned about the JV streamer. It could signal a new beginning for channel owners, who might decide to keep bundling their networks in smaller packages and offering those bundles directly to consumers instead of using cable and satellite firms as middlemen.
This won’t happen right away, however, and even without the introduction of the JV streamer, it’s been clear for many months that the old way of doing business for cable and satellite distributors is no longer tenable. Cord-cutting has already sealed the fate of pay-TV which is the argument that Iger and Murdoch have been trying to communicate without explicitly saying this week.
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