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Technology

Media execs frustrated with Iger's swan song plan for multiple Disney direct-to-consumer platforms

A number of high-level executives at large media companies have expressed frustration and anger with Disney CEO Bob Iger’s decision to create two direct-to-consumer offerings, according to conversations these executives have had with CNBC.

The common refrain of these executives was that the cost of sports programming led by Disney’s ESPN has made the cable TV bundle too expensive, and rather than working to fix that problem, Disney is beginning its exit.

One executive likened it to a passenger in a small row boat who, in deciding to jump off, capsizes the boat, throwing everyone else in the water with him.

Disney announced this week that it would remove its movies from popular streaming service Netflix beginning in 2019 and start its own streaming service. Next year, ESPN’s streaming service kicks off, with content from 10,000 sporting events.

Beyond frustration with Disney’s decision, several of the senior executives, who declined to be named, say they believe the effort will have a hard time becoming meaningfully profitable.

After 2019, Disney will forgo the profits it derives from its Netflix deal and will likely still be dealing with the continued erosion of its ESPN subscriber base and the drag on earnings that presents. Will a direct-to-consumer offering of entertainment and one of various sports programming be enough to stem those declines? Even a service priced at $10 a month that garners 20 million subscribers might not be enough to replace lost revenue from Netflix and ESPN subscriber declines.

The executives who spoke to CNBC also point out that by the time this plan is implemented, Iger will have left the company he has so successfully run for the last 12 years. He and Disney’s board have targeted July 2019 as his retirement.

Iger responded on the record, saying: “Any intellectual property company should be careful about being lulled into supporting a platform that may not serve the customer effectively in a disrupted world.”

Source: Tech CNBC
Media execs frustrated with Iger's swan song plan for multiple Disney direct-to-consumer platforms

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