The cord-cutter’s dream of buying ESPN as a stand-alone channel will have to wait a little longer. In a conference call with analysts Tuesday, Bob Iger, chief executive of the Walt Disney Company, said ESPN’s corporate parent sees no compelling reason to take an over-the-top (OTT) version of the sports powerhouse to market anytime soon.
“It would be somewhat precipitous to do that now,” Iger said.
Discussing Disney’s estimate-shattering first-quarter earnings results, Iger faced multiple questions about Sling TV, a new streaming service from Dish Network Corp. that offers ESPN -- along with a dozen other cable channels -- for only $20 a month. Sling is the first service that lets sports fans watch live ESPN without a cable or satellite subscription.
The service has been cited as further evidence that the traditional cable bundle is an endangered species, but Iger said Sling TV is simply an attempt to convince millennials who have never had a cable subscription to sample a low-cost alternative. “We believe it’s a worthwhile experiment,” he said.
He went on to say Disney has no data about who or how many people have signed up for Sling TV since Dish launched it last week.
An increasing number of networks are offering OTT options, including HBO, CBS and Showtime. Most recently, Viacom Inc. said it will unveil a direct-to-consumer digital subscription service for Nickelodeon. The announcements come amid high-profile carriage disputes that have resulted in occasional blackouts for CBS, Viacom and others.
But Iger made it clear that for ESPN -- the most watched network on cable -- the bundled status quo is working fine, and an OTT version of the network is not on the immediate horizon. That said, he conceded that the market dynamics ultimately may shift and hinted that a direct-to-consumer ESPN is an eventual inevitability. He also said Disney is considering options for OTT products that would deliver Marvel Comics and "Star Wars" properties.
Disney reported record quarterly revenue of $13.31 billion on Tuesday, blowing past analysts’ estimates of $12.87 billion. The Burbank, California, media giant reported net income of $2.18 billion, a 19 percent increase over the same period last year. Diluted earnings per share rose 27 percent to $1.27, marking the sixth consecutive quarter of double-digit growth for the company. Analysts polled by Thomson Reuters had expected Disney to report only a modest increase in net income, in part due to difficult comparisons with last year, when “Frozen” fever was high.
More than a year after the animated phenomenon hit theaters, “Frozen” is the gift that keeps on giving. Iger called it the “biggest and fastest-growing toy property of the year.”
Read Disney’s full earnings results here.