Disney No Longer Looking To Sell Linear TV Channels
Earlier this summer, Disney CEO Bob Iger spoke in an interview with CNBC and said that linear may not be core to Disney’s business anymore, setting off a chain of talk of Disney looking to sell off its linear assets, including its ABC local networks, along with other channels like National Geographic.
Byron Media Group revealed that it had put in an offer of $10 billion for those channels, and it was also reported that Nexstar was interested in buying these assets. Resulting in Disney putting out a statement saying no decision had been made and no buyer had been found.
In September, Disney made a new agreement with Charter Communication, which will give Spectrum cable providers free access to the ad-supported tier of Disney+. However, many of Disney’s channels, including Freeform, Nat Geo Wild and Disney Junior, were removed. Other cable providers are looking to follow suit when their negotiations come up.
Adding more fuel to the fire that Disney is looking to sell or close down channels. Plus, with the pending purchase of the remaining stake of Hulu from Comcast for over $8 billion, it’s likely Disney has been investigating ways to help fund this purchase.
And this week, Bob Iger spoke at the New York Times DealBook Summit and backtracked on his comments in the CNBC interview, saying he never was intended to affix a “for sale” sign to ABC, local stations and other linear networks.
“The business model that those linear channels rested on and have succeeded on top of for decades. Sometimes, when I am looking for a reaction to my own thought process, I like to test that process in public, particularly in ways that I might be able to get a reaction from the investment community. So, my thought was at the time that I would essentially be public with that thought process.”
Apparently, Bob Iger said that the media and Wall Street took his words out of context and that he didn’t want to be seen as an old media executive and willing to make changes, but specifically said:
“I did not say they were for sale. The coverage of what I said said they were for sale.”
The event’s moderator, Andrew Ross Sorkin, asked Iger if he still thinks linear TV is a good business, to which Iger replied and said:
“has been unbelievably rigorous at the company and involves a number of executives who are managing those businesses We’ve determined a few things — 1) that they can be run more efficiently, with some difficult choices. … Second, they can be run in partnership with [streaming]. .. They’re a means of aggregating audience and amortizing costs, of basically reaching more and different people. .. Through this process of being more public about what might happen or what could happen and really rolling up sleeves to see, is this something we should do? Should they be divested? Should they be kept? If they are kept, how should they be run? They’re being run more efficiently today than in July, when I made those comments.”
While there is still money to be made by linear channels, it makes sense for Disney to maintain those, however, does it need as many? Will Disney scale back how many channels it needs?
Iger’s comments about how streaming and linear can be a partnership, because they are both still customers and likely, we are going to see more content shared among the platforms, to help make money from both linear and streaming advertising revenue, plus reduce spending costs on content and making it more efficient, especially as FX, Disney Channel, National Geographic and ABC are major content creators for its streaming services.
With Disney set to bring Hulu content onto Disney+ later this year, we will likely see more cost-cutting and cross-synergy between Disney+ and linear. There are also many advantages for Disney to hold onto ABC, for the benefit of ESPN content, such as Monday Night Football, which has been hugely successful this winter season.
It certainly makes sense, at least, for Disney to maintain linear channels like “Disney Channel”, “FX” and “National Geographic”, though I still think the spin-off channels are going to still be scaled back in the future, as cable providers start cutting back how many channels they want to save money.
Do you think Disney is right to keep its linear channels? Let us know on social media!
Source – Deadline
