Disney says ‘No’ to OTT

ESPN and Disney a la carte or OTT? Not happening, said Disney CEO Bob Iger during the company’s Q3 earnings call Thursday. At least, not right now.

“We will be well positioned to go direct to the consumer or — with a la carte offerings if the market place demands it,” he said. “But we don’t feel a great need to do that now.”

Iger said the company doesn’t plan to follow CBS and HBO over the top because he believes the cable bundle as it exists “remains the dominant entertainment or television package in the home,” one that will continue.

Nonetheless, Iger said, there are changes in the ecosystem, including sustainability of the bundle and the impact of new technologies like OTT services.

“We do see that Millennials seem to be becoming subscribers a little bit later than perhaps they used to,” he said. “We just feel that when you look at the quality of what’s offered… and you consider the price, that that is likely to remain dominant for a long time.”

Still, he said, Disney would be able to go over the top if the market changed substantially.

“If the bundle were to break up, which we don’t foresee happening anytime soon, we are very well positioned to move very quickly to take advantage of — I’ll call it a broadband-only universe, or an a la carte universe, because of the strength of the brand, the programming, the rights that we’ve bought,” Iger said yesterday. “There’s no need to do it now in a way that precipitates the downfall of that bundle.”

That statement is very similar to one HBO chief Richard Plepler made in January, 10 months before HBO announced it was, in fact, going to offer an OTT product to consumers who didn’t subscribe to a pay-TV service.

“It’s about arithmetic,” Plepler said then. “If the arithmetic changes and the arithmetic makes sense in a different way, we are not going to be caught without the ability to pivot.”

Iger said Disney would experiment with some OTT products, including an NBA package, but it won’t he said be as strong as the games offered over ESPN.

“It may enhance your connection to or your enjoyment of the sport, but it’s not going to replace it,” he said.

That, of course, raises the question of the value of a pared-down offering.

Will it be enough to attract an audience that would be large enough to support it, to draw brands to it and to grow?

Or is it designed as a placeholder?

What do you think?

Either way, stay tuned… there’s more change in the air.