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On this week’s third quarter earnings call, Disney CEO Bob Iger spoke at length about the future of Disney content on the web and other streaming services.
Iger was reserved about the prospect of big deals, with wariness that has been credited to the original deal for Starz content on Netflix. When the deal was cut way back in 2008, Netflix and the network agreed on a $30 million a year contract for three years- before the streaming service took off and became the on-demand video powerhouse it is today. Now negotiations are hovering around $250-300 million per year.
Iger acknowledges that with streaming content deals, the game changes way more quickly than the company initially anticipated, and indicated that Disney is making short-term decisions only. He explained:
“So I think this is kind of a developing situation. I think it’s very exciting because of what it provides us, what it provides the distributor and what it provides the consumer. But you’re still at the beginning of the beginning on this.”
When asked about possibly cutting deals with services like Hulu or TV Everywhere, Iger said that the company was still considering term length as well as technology and authentication practices for Disney content:
“We will basically push the window back or make access to the programming more difficult or later, except if a customer is authenticated as a subscriber. And I think you will see, over the next few years, a lot of deals done that enable this. We now have to hope that not only is the technology improved that enables authentication, but that the whole user experience gets better.
Just as a for instance, there have been over 2.5 million downloads of the Watch ESPN App. A lot of people downloaded it, but they were subscribers to services that hadn’t cut authentication deals with us yet. But even where there were subscribers to services that had cut authentication deals, the user experience still could be better; it needs to improve.”
During the call, Iger said he expected deals from retransmission of content to “grow to $400-$500 million by 2015.”
