Disney CEO Bob Iger: OTT Video No. 1 Priority, Not Competing Against Netflix

With the Walt Disney Co. planning to launch a branded over-the-top video platform in late 2019, the SVOD service, along with digital platform ESPN+ and majority ownership of Hulu will dominate the company’s objectives in the coming year, according to CEO Bob Iger.

Speaking Aug. 7 on the fiscal call, Iger said OTT video is a reality and here to stay. He said the pending Disney services would focus on incorporating core brands, including Marvel, Star Wars and Pixar, in an effort to complement, and to a lesser extent, compete with SVOD platforms such as Netflix, which is spending $8 billion this year alone on original content.

“The launch of [direct-to-consumer] product at the end of 2019 is the biggest priority of the company during calendar 2019,” said Iger, adding that the service would initially target core Disney fans.

“There will be significant amounts of support given across all of our assets to see to it that the platform launches successfully,” he said.

The service/app will feature original branded series and movies, including the first-ever live-action “Star Wars” series, and new episodes of the “Star Wars: Code Wars” animated series; a live-action version of The Lady and the Tramp, in addition to other new series based on popular Disney properties.

“The [20th Century Fox Film] acquisition brings even more opportunity to create original programming for this platform,” said Iger, who added Disney plans on walking before running with the new service.

“It’s takes time to build the kind of content library [for the service that] ultimately we intend to build,” he said. “Because the app will feature Pixar, Disney, Marvel, National Geographic, Lucasfilm and Star Wars, we feel that it doesn’t have to have anything close to the volume of what Netflix has.”

“This gives us the ability to not necessarily be in the volume game, but be in the quality game,” said Iger. “It’s not as though the cupboard’s going to bare.”

Iger said the recently launched ESPN+, pending family-oriented Disney service along with the existing Hulu platform appeal to different consumer tastes and audience demographics.

“As we look at the environment today … we don’t want to go to market with an aggregation play that replicates the multichannel [TV bundle] environment, because we feel consumers are more interested in making [channel] decisions on their own,” said Iger. “We can offer that kind of flexibility to consumers because that’s … what consumer behavior demands.”

The CEO reiterated that the Disney OTT service would be priced lower than Netflix to reflect the difference in content offerings. He said that upon closing the Fox acquisition, Hulu would “also fit into our app strategy.”

When asked how the 2019 theatrical slate could impact the streaming service, Iger said existing distribution windows would be configured to benefit the OTT service. Next year’s slate includes Captain Marvel, Dumbo, Avengers 4, Aladdin, Toy Story 4, The Lion King, Jungle Cruise, Artemis Fowl, Frozen 2 and Star Wars Episode 9.

“For 2019, the studio movie slate is clean and unencumbered,” he said.

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