Disney will he follow Warner Bros. Discovery and Comcast to divide most of its television assets from its streaming activity? Don’t bet on it.
CEO Bob Iger appeared on CNBC on Tuesday morning, where he was interviewed by David Faber about the acquisition by his Comcast company in Hulu, which was finalized on Monday.
But Faber also took advantage of the opportunity to ask if Iger, who actually launched the idea of dividing linear television from streaming in a CNBC interview two years ago, if Disney re -evaluates her decision to keep his business together.
Warner Bros. Discovery said on Monday that he will separate in two: a company with studios and HBO Max Streaming Business, and another with its global television networks. This decision followed a similar decision by Comcast, which turns most of its wired channels in slope later this year, but keeping the NBC, Bravo, Peacock and theme parks.
“Shortly after my return to Disney, I put everything on the table and asked the team to assess if we should buy Hulu or if we should sell Hulu, if we have to sell our linear television networks or if we should stand there, and after a fairly long process [Hulu] In its entirety, but also to keep linear television networks and integrate them transparently into our streaming company, “said Iger.” What this allowed us to do is global income, both on the side of the sub-fresh and the advertising side. There are still enough subscribers on linear television to generate a significant amount of income in advertising and subscription costs. We program them perfectly, we manage them in a single organization. And so there have been great economies of scale to make. »»
“This is one of the things that allowed us to transform the streaming activity of a huge loss to profitability, and in the coming years, this will allow us to considerably grow the margins on the Streaming side, due to the capacity to amortize the costs of the program and the capacity to aggregate essentially the public in income,” he added. “It is also interesting for us that, as many others leave this business, I think that gives us a stronger hand to stay in this business. We are very concentrated. We will have, interesting, a linear television company which is associated with a streaming company. So, when you think about it, these companies derive will not have the assets of a streaming perspective that we will have.”
And having a distribution network like ABC is a large part.
“I think there is much more value in a broadcast network, once again, if it is very, very, very transparent with a streaming company,” said Iger. “I mean, you are thinking of our main networks, of course, ESPN is important. It will be connected, obviously, entirely with the digital offer of ESPN. Disney Channel is transparently connected with Disney Plus. FX and ABC have fueled Hulu programming very effectively. Streaming, you have a company that actually offers us the opportunity not only to grow, but also to develop margins in the process.
Iger also said that Disney + will most likely follow the path followed by Netflix, which has stopped reporting its number of subscribers on a quarterly basis.
“Probably,” said Iger when asked by Faber if the company will continue this strategy. “We focus on EBITDA and cash flows and growing margins, and that is, in fact, what we do. I think at some point, what we are going to are the net profit.”
