Disney's Iger: 80% of ESPN sub losses were due to pay-TV contraction, not skinny bundles

Disney CEO and Chairman Bob Iger told investors that ESPN's subscriber losses have been overstated, and that most of them have come from the overall recession of the pay-TV market, not from operators excluding the national sports network in their skinny bundles.

disney bob iger

Iger

Last month, Nielsen reported that ESPN had lost around 3.2 million subscribers in a little more than a year.

"ESPN's experienced some modest sub losses although those have been less than reported by one of the prominent research firms," Iger said during Disney's second quarter earnings call yesterday, according to a Seeking Alpha transcript of the event. "The numbers that have recently been in the press which are Nielsen numbers were higher in terms of sub losses than those that we are seeing. But we're not at this point ready to give specifics in terms of what those numbers are."

Around 80 percent of ESPN's subscriber losses, Iger said, "were due to decreases in multichannel households with only a small percentage due to skinny packages." The Disney chief also downplayed concerns that the national sports cable network would find itself shunned from basic programming tiers, as programmers look to reduce channel bundles into small packages of broad-skewing networks. The move has so far relegated channels like ESPN to add-on packages categorized by themes such as "sports."

ESPN is currently suing Verizon, for example, for downgrading ESPN and ESPN 2 to the sports add-on package of its Custom TV skinny bundle. 

"Overall though we believe the expanded basic package will remain the dominant package of choice for some years to come, because to the quality and variety it represents for a price that is generally considered fair and appropriate," Iger said. "We also see the continued development of new platforms with smaller channel offerings, which we see as a positive trend for us, since ESPN is a must-have brand as part of the initial service offering for these new packages."

Iger also re-iterated Disney's position that ESPN won't launch a direct-to-consumer streaming product for at least five years.

"So when we look at the universe we don't really see dramatic declines over the next say five years or so and therefore we are not taking what I would call radical steps to move our products into over-the-top businesses to disrupt that business because we don't think right now that is necessarily the greatest opportunity," he said. "We just don't think it's necessary."

For more:
- visit this Walt Disney Company investor relations page

Related articles:
ESPN scratches and claws to sustain its margins amid souring pay-TV economics
Disney's Iger: ESPN will eventually go a la carte, but not in the next 5 years
ESPN has lost 3.2M subs in the past year; could pull itself off Sling TV
Only 36% of consumers would add ESPN to their personal a la carte bundle, Digitalsmiths study says

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