Disney to Demonstrate DTC Service Disney+ April 11

The Walt Disney Co. will demonstrate its pending direct-to-consumer streaming service Disney+ and offer a first look at some of the original content being created by the company’s TV and film studios exclusively for the service at an investor day presentation April 11, the company announced.

Also, effective for the first quarter of fiscal 2019, the company will begin reporting segment operating results for four segments: media networks; studio entertainment; parks, experiences and consumer products; and direct-to-consumer and international (DTCI), the company reported Jan. 18 in a filing with the SEC. In the Form 8-K, the company also recast financial results for the past three fiscal years to reflect the reorganization of Disney’s business segments. In the fiscal year ended Sept. 29, 2018, recast numbers show the DTCI segment with a loss of $738 million.

“Our top priority is fully leveraging our global brands and great content to create world-class direct-to-consumer entertainment,” said Disney chairman and CEO Robert A. Iger in a statement. “We have the structure and management in place to drive growth in our DTC business, and our acquisition of 21st Century Fox further enhances our ability to deliver significant value to consumers and shareholders.”

“Acquiring BAMTech enabled us to enter the DTC space quickly and effectively, as demonstrated by the success of ESPN+,” Iger said in a statement. “The service surpassed 1 million subscribers in its first five months and continues to grow as it expands its content mix, all of which bodes well for our upcoming launch of Disney+. The ability to connect directly with millions of Disney, Pixar, Marvel, and Star Wars fans creates tremendous opportunities for growth. In addition to leveraging our existing IP in new ways, we’re making significant investments in original content exclusively for Disney+, creating an impressive pipeline of high-quality movies and series we believe will make the streaming service even more compelling for consumers.”

The slate of Disney+ content currently in production includes the first-ever live-action Star Wars series “The Mandalorian”; an original series based on Disney Channel’s “High School Musical”; an animated series based on Pixar’s “Monsters, Inc.” franchise; a new season of the “Star Wars” animated series “Clone Wars”; a live-action version of the animated classic Lady and the Tramp; and original docu-series. A live-action Marvel series starring Tom Hiddleston and a second “Star Wars” series starring Diego Luna are also in development, the company announced.

Skydance Media Names Former Pixar CCO John Lasseter Head of Animation

In a controversial move, former Pixar Animation Studios chief creative officer John Lasseter has been named head of Skydance Animation.

Lasseter, who abruptly resigned from The Walt Disney Co. in 2017 following allegations of inappropriate workplace behavior, will report to David Ellison, CEO, Skydance Media, in Santa Monica beginning later this month.

“We did not enter into this decision lightly,” Ellison said in a statement. “John has acknowledged and apologized for his mistakes and, during the past year away from the workplace, has endeavored to address and reform them.”

Ellison said Lasseter is a singular creative and executive talent whose impact on the animation industry cannot be overstated.

“He was responsible for leading animation into the digital age, while telling incomparable stories that continue to inspire and entertain audiences around the globe,” Ellison said.

Indeed, Lasseter’s signature animation style to Pixar’s films grossing more than $11 billion in global box-office receipts. Lasseter was the executive producer of Walt Disney Animation Studios’ Academy Award-winning feature Frozen (2013), which also won an Academy Award for best original song (Let It Go). The film, which crossed the $1 billion mark in March 2014, is the number one animated feature of all time.

Lasseter made his directorial debut in 1995 with Toy Story, the world’s first feature-length computer-animated film, for which he received a Special Achievement Academy Award recognizing his inspired leadership of the filmmaking team. He and the rest of Toy Story’s screenwriting team earned an Academy Award nomination for best original screenplay, marking the first time an animated feature had ever been recognized in that category.

Lasseter also directed A Bug’s Life (1998), Toy Story 2 (1999), Cars (2006) and Cars 2 (2011). Lasseter executive produced all Pixar features since Monsters, Inc. (2001), including the studio’s eight Academy Award-winners Finding Nemo (2003), The Incredibles (2004), Ratatouille (2007), WALL•E (2008), Up (2009), Toy Story 3 (2010), Brave (2012), and Inside Out (2015), as well as films The Good Dinosaur (2015), Finding Dory (2016), Cars 3 (2017), Coco (2017) and Incredibles 2 (2018).

Lasseter said he was grateful to David and the Skydance team for the opportunity and acknowledged being entrusted with an “enormous” responsibility.

“I have spent the last year away from the industry in deep reflection, learning how my actions unintentionally made colleagues uncomfortable, which I deeply regret and apologize for,” Lasseter said. “It has been humbling, but I believe it will make me a better leader.”

In his new role, Lasseter will be responsible for setting the overall strategy and creative direction for Skydance Animation. He will drive the division’s artistic growth, overseeing production and operations, to ensure a robust slate of animated entertainment across all media.

Established in 2017, Skydance Animation has embarked on a multi-year partnership with Ilion Animation Studios, a dedicated CGI feature animation studio based in Madrid, to develop and produce a slate of high-end animated feature films and television series.

Its first two animated feature-length films have been announced: Luck, directed by Alessandro Carloni and written by Jonathan Aibel & Glenn Berger and an Untitled Action Fantasy, directed by Vicky Jenson and written by Linda Woolverton.

Disney/Verizon Partnering for 5G Media, Entertainment

The Walt Disney Co. and Verizon Communications reportedly are partnering to explore entertainment and media opportunities in the nascent 5G wireless network platform.

5G claims to be able to deliver upwards of 10 gigabits of data per second, which could enable the downloading of a movie within seconds on a smartphone versus many minutes on 4G.

Disney’s upstart StudioLab unit is working with Verizon testing 5G applications for the distribution of content.

“We see 5G changing everything about how media is produced and consumed,” Jamie Voris, chief technology officer at Disney Studios, told Variety, which first reported the pact.

Verizon last October launched 5G network capability in four cities – a move rivaled by competitor AT&T. Still in the early stages of deployment and functionality, 5G marketing and hype – however – has shown no limits.

When AT&T recently changed the old 4G LTE logo to 5G on branded smartphones, Verizon (and T-Mobile) cried foul.

“The potential to over-hype and under-deliver on the 5G promise is a temptation that the wireless industry must resist,” Verizon wrote in a letter reported by Endgadget (which Verizon owns). “We’re calling on the broad wireless industry to commit to labeling something 5G only if new device hardware is connecting to the network using new radio technology to deliver new capabilities.”

T-Mobile, in a post on Twitter, was slightly less diplomatic, tweeting a video showing someone sticking a “9G” sticker on an iPhone with the following caption: “Didn’t realize it was this easy, brb updating.”

Indeed, without a 5G-capable phone, simply claiming to be able to deliver content faster over old technology is disingenuous.

“People need a clear, consistent and simple understanding of 5G so they are able to compare services, plans and products, without having to maneuver through marketing double-speak or technical specifications,” wrote Verizon.

 

 

 

 

 

 

Disney+ SVOD Service Names Joe Earley Head of Marketing/Operations

The Walt Disney Co. has hired long-time TV executive Joe Earley as EVP of marketing and operations for its pending Disney+ subscription streaming video service.

Earley, who once headed marketing/operations at Fox Broadcasting Co., most recently was president of The Jackal Group — a Los Angeles-based  television, film, commercial theater and digital studio.

At Disney+, Earley is expected to leverage his industry connections for the SVOD platform launching in the fourth quarter.

“Joe’s industry knowledge and understanding of where the global entertainment marketplace is going will be a key component as we launch and expand the Disney+ footprint,” said Ricky Strauss, president, content and marketing, Disney+, to whom Earley reports.

“The breadth of his experience in both content marketing and production, combined with the quality of his relationships in our industry will be huge assets to Disney+,” Strauss said.

 

Disney’s Janice Marinelli Upped to President, Global Content Sales and Distribution Following Fox Acquisition

Longtime Disney home entertainment executive Janice Marinelli has been promoted to president, global content sales and distribution as part of planned management changes following the media giant’s $71 billion acquisition of 20th Century Fox Film Corp.

Marinelli, who had been president of Disney/ABC Home Entertainment and Television Distribution, reports to Kevin Mayer, chairman of The Walt Disney Co.’s direct-to-consumer & international segment.

Separately, Rebecca Campbell, president, The Walt Disney Company EMEA,  continues in her position with added oversight of Russia and former satellite countries in the Soviet Union.

Jan Koeppen, president of Fox Networks Group Europe and Africa, will transition to president, television and direct-to-consumer, The Walt Disney Company EMEA.

Carlos Martinez, president, Fox Networks Group, Latin America, becomes EVP and GM, Media Networks, North and Brazil, The Walt Disney Company Latin America.

Marina Jigalova-Ozkan continues as managing director for Disney’s direct-to-consumer business, Russia and CIS.

Diego Lerner, president, The Walt Disney Company Latin America, continues in his position, while Uday Shankar, president, 21st Century Fox, Asia, and CEO of Star India, becomes chairman, Star and Disney India, and president, The Walt Disney Company Asia Pacific.

All report to Mayer.

“The planned restructuring of our business units outside of the U.S. will result in a stronger, more agile organization, one that is better able to pivot and capitalize on the many opportunities present in today’s fast-changing and increasingly complex global marketplace,” Mayer said in a statement. “Once the acquisition is complete, all three regions will be led by exceptional, highly experienced executives who will combine the ‘best of the best’ talent from both organizations. This new structure and the outstanding leadership team we’ve put in place are clear demonstrations of our strong commitment to integrating operations and thoughtfully executing our strategic priorities around the globe.”

Marinelli spoke a year ago at the Dec. 2017 Variety Hall of Fame awards dinner and ceremony, drawing solid applause when she advised her fellow home entertainment executives to “just keep swimming.”

The line, from the hit Disney film Finding Nemo, seemed to resonate with the several hundred execs in the room, many of whom have been contending with increasingly choppy seas for the better part of a decade.

Later, she doubled down on her beliefs in the home entertainment sector – including the physical disc – in an interview with Media Play News.

“Pysical consumption continues to be a vibrant, viable and top-performing line of business for us and it is also proving to be a very valuable resource in the transition to digital with e-copy redemption,” she said. “This year the in-home division broke and set new records with four bestselling physical titles in the top 10 to date including tentpoles Star Wars: Rogue OneMoanaGuardians of the Galaxy Vol. 2 and Beauty and the Beast.  As viewing habits and consumer consumption rapidly evolve, we continue to evaluate our offerings on a regular basis and what will best meet the needs and demands of our customers.  This year we vigorously expanded into the 4K Ultra HD Blu-ray premium format beginning with inaugural title Guardians of the Galaxy Vol. 2, which quickly rose to the top of the industry’s 4K physical sales chart.”

She also talked up digital ownership, with a nod to the then just-launched Movies Anywhere service for movies. “Consumer centricity was without a doubt a defining characteristic of 2017, which was most notably addressed by the launch of the multi-studio digital locker Movies Anywhere,” she said. “Movies Anywhere is a huge win for the consumer, providing them with more freedom, flexibility and utility and their digital library can now be viewed through a range of devices and digital retailers, anytime and anywhere. The strength of the studios and digital retailers that have come together at launch is unprecedented.”

‘Avengers: Infinity War’ to Hit Netflix Dec. 25

Disney may be leaving Netflix, but not without a parting Christmas gift.

The Disney/Marvel blockbuster Avengers: Infinity War, which has earned more than $678.8 million at the box office, will come out on the streaming platform on Christmas day, according to Netflix.

The streaming platform’s NX on Netflix Twitter account tweeted, “Oh, snap. Avengers: Infinity War is coming to @Netflix on December 25.”

Disney is readying the unveiling of its own streaming service in 2019, Disney+, which will be fueled by Disney content, including that from Marvel and Lucasfilm, which has the “Star Wars” franchise.

After helping grow Netflix with a streaming deal in 2012, The Walt Disney Co. in 2017 announced it would be withdrawing its content from the service to build its own subscription platform.

At a May 14, 2018, MoffettNathanson Media & Communications Summit in New York, Netflix CCO Ted Sarandos was asked about the impact of Disney going direct-to-consumer and the pending loss of its original movies.

“People always ask me, ‘Where you surprised Disney is going to go direct?’ I don’t know what took them so long, exactly,” said Sarandos.

Still, he said the loss of Disney content wasn’t much of a blow.

“[Our subs] watch [Disney movies], but it wasn’t particularly passionate watching and those films are widely available on a bunch of other channels,” Sarandos said.

Disney Has Big Plans for Hulu

Hulu may be losing millions in equity for its corporate parents, but that isn’t stopping The Walt Disney Co. from dreaming big going forward about the 11-year-old SVOD service and online TV platform.

Disney, which attributed $10 million in Q4 equity losses to higher programming, marketing and labor costs at Hulu, partially offset by growth in subscription (20+ million) and advertising revenue, will become majority (60%) owner of the SVOD when its acquisition of 20thCentury Fox Film Corp. is finalized.

Hulu’s other corporate owners include Comcast (30%) and WarnerMedia (10%).

Speaking Nov. 8 on the fiscal call, Disney CEO Bob Iger thinks Hulu’s sub growth, brand strength and user demographics portend an opportunity to increase investment in Hulu – especially on programming.

“With this [Fox] acquisition comes not only some great IP, but some excellent talent, particularly on the television side,” Iger said. “And we aim to use the television production capabilities of the combined company to fuel Hulu with a lot more original programming … [content] that we feel will enable Hulu to compete even more aggressively in the marketplace.”

Specifically, Iger cited Hulu’s younger user base – apparently 20 years younger than competitors Netflix and Amazon Prime Video – and penchant for off-network content.

“And that’s clearly attractive to advertisers, which I think has been somewhat underappreciated about Hulu in that it … can offer targeted ads,” Iger said.

Hulu’s base $7.99 subscription plan features ad-supported content, while the $11.99 plan is ad-free. Iger says the service – especially the $39.99 Hulu With Live TV – has some price elasticity of demand.

“I think there’s an opportunity to improve – or I should say increase our pricing there,” he said.

Notably, Iger envisions Hulu focusing on general and edgier entertainment (i.e. Fox’s “American Horror Story” and R-rated movies), with Disney+ catering to softer fare.

“We’ll leave the more family-oriented programming to the Disney+ app,” he said.

DOJ Upping Comcast Scrutiny Over Hulu

When Comcast acquired NBC Universal in 2011, federal regulators required the Philadelphia-based media conglomerate to step away from management issues regarding Hulu — the subscription streaming video service it co-owns with the Walt Disney Co., 21st Century Fox and AT&T’s WarnerMedia.

With those and other regulatory restrictions lifted this year, Comcast, which owns 30% of Hulu, now has more of input into how Hulu — and online TV service Hulu Live — operate. The cable operator announced last month the appointment of three members to Hulu’s board of directors, who include NBC Universal executives Jeff Shell, Linda Yaccarino and Matt Bond.

Now the U.S. Depart of Justice’s antitrust unit plans to up its oversight into how Comcast its renewed leverage on how Hulu operates in the pay-TV ecosystem, according to Assistant Attorney General Makan Delrahim.

Speaking Oct. 3 to Senators in Washington, D.C., Delrahim was asked if Comcast increased oversight of Hulu posed a threat to consumers.

“Certainly, Hulu could be a competitor to the cable business,” Delrahim told Senator Richard Blumenthal (D-Conn.), according to Bloomberg. “And it’s one that we will examine carefully to see if they might take any conduct that would harm its ability to compete.”

Indeed, in a letter to Comcast prior to restrictions being lifted, Delrahim reminded the company that government oversight was not in the past tense.

“The department retains jurisdiction to enforce the antitrust laws and takes its obligations seriously,” he wrote on Aug. 14.“We would appreciate your cooperation in keeping us informed by providing the department with any plans you may have to change your policies or practices involving video programming and distribution.”

Interestingly, the DOJ could forward the letter to Disney, which will own 60% Hulu following its $71 billion acquisition of select Fox assets, including Hulu. That deal, whose price tag was significantly reduced following Comcast’s separate purchase of British satellite TV operator Sky, is still under regulatory approval.

Disney plans to launch a branded OTT video service next year – as it did this year with ESPN+.

 

Comcast Acquires 30% of Sky Stock Following Weekend Auction Win

Comcast Corp. Sept. 25 disclosed it has acquired 30% of British satellite TV operator Sky Plc., shares following a weekend takeover auction win over 21st Century Fox.

Fox, which owns 39% of Sky, is selling its stake, in addition to 20thCentury Fox Film, to The Walt Disney Co.

Comcast said it would continue to acquire Sky shares from investors for the £17.28 ($22.60) per share price hammered out in the special auction for controlling interest in the pay-TV operator. The share price values Sky at more than $40 billion. Fox had offered £15.67 per share.

“Comcast Bidco will continue to acquire Sky Shares in the market from eligible shareholders outside the United States at up to and including £17.28 in cash for each Sky Share,” Comcast said in a statement first reported by CNBC, which is owned by Comcast’s NBC Universal subsidiary.

Indeed, Comcast needs to acquire 50% of Sky’s stock plus one additional share to complete the takeover. Sky’s board approved Comcast’s offer, calling it “materially superior” to Fox’s bid and called on Sky investors to “immediately” accept it.

Notably, when Fox first bid on Sky’s remaining stock in late 2016, its offer totaled £10.75 per share.

Meanwhile, Comcast shares continue to decline following the auction, with some analysts contending the media giant overpaid for a waning distribution model (satellite TV).

Not so for Liberty Global CEO Michael Fries, who called Comcast’s purchase price a “great outcome” for Sky shareholders. The executive said it values the European pay-TV market, an ecosystem he claims is often overlooked.

Fries called on Comcast CEO Brian Roberts to remain “rationale” on the deal and to give it time to playout.

“I think the purchase price is terrific,” he told Bloomberg.

 

ESPN+ Streaming Video Service Tops 1 Million Subs

The Walt Disney Co.’s direct-to-consumer and international segment Sept. 20 announced that ESPN+, the subscription streaming video service, has surpassed 1 million paying subscribers since its April launch.

The $4.99 monthly service ($49.99 per year) represents Disney’s first foray into branded standalone OTT video – a strategy Disney began implementing with the $3.75 billion acquisition of BAMTech in 2017.

“Reaching one million paid subscribers … in such a short time is an incredible testament to the teams from DTCI and ESPN who have worked tirelessly to bring this product to market,” Kevin Mayer, chairman, direct-to-consumer and international, The Walt Disney Co., said in a statement.

ESPN+ is intended to complement the ESPN pay-TV network, while focusing on global sports and original programming, including new “30 for 30 documentary, “Seau” (directed by Kirby Bradley); original studio programs, “Always Late with Katie NolanDetail from Kobe Bryant, The Fantasy Show with Mathew BerryESPN FC”, “In The Crease”, “Ariel and the Bad Guy with Ariel Helwani; original series like Earn Everything” about Duke Basketball, NBA: YearOneDraft Academy and Quest for The Stanley Cup; and the entire “30 For 30” library, among other shows.

ESPN+ is part of the ESPN app available across mobile (iOS, Android) and living room devices (Android TV, Apple TV, Chromecast, Fire TV, Roku. ESPN+ is also available on the Web through ESPN.com.

An update to the ESPN App (v 6.2) last month integrated “ESPN Insider” into the ESPN+ service, enabling subs access to editorial analysis on players, teams, and leagues, as well as analytics tools to help users get an edge in their fantasy games.

ESPN+ subs get a differentiated advertising experience throughout the entire ESPN App or website, with no display ads and no pre-roll ads within video content (ads remain in the natural advertising breaks of live sports content).

“Combining sports, technology and the ESPN brand is a very powerful combination,” said Jimmy Pitaro, president of ESPN and co-chair, Disney Media Networks.