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Disney: ESPN Eyes More OTT Deals

While its ESPN service continued to bleed linear subscribers in the fiscal first quarter, Walt Disney Co. chairman and CEO Bob Iger said more deals are on the way with over-the-top providers, including pacts that could help boost penetration rates for the sports channel.

Iger and other programmers have complained in the past about the lack of accurate audience measurement for over-the-top services. On a conference call with analysts to discuss fiscal first quarter results, Iger said he still has confidence in ESPN, adding that the service has already helped OTT providers yield “nice” subscriber gains.

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ESPN recently landed a deal with Hulu (in which Disney is a part owner) for its upcoming OTT launch later this year, has signed a deal with an as yet unnamed OTT distributor and is in discussions with other services.

“The deals we’ve done, it seems like we’re on the cusp of some significant growth for new entrants in the multichannel marketplace,” Iger said on the call. “What we like about them is they are mobile first, their user interfaces tend to be very strong and their pricing is lower than the expanded basic bundle most MVPDs are offering. This obviously gives us a chance to attract consumers that may not sign up for multichannel service, or hold consumers into multichannel subscriptions.”

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He added that perhaps the most important aspect of these deals is that ESPN is to be available in all households launched.

“These are light packages that off us 100% penetration from those packages,” Iger said. “We think this wave that we’re seeing really is a signal for what is to come and what the future will be.”

That could be key in that part of ESPN’s subscriber erosion has been blamed by its absence from some so-called skinny bundles that are geared toward non-sports lovers.