bingo2023| Disney CEO Iger: Disney is 'significantly' cutting investment in traditional TV
editor 2024-05-16 04:45:32 Nature 31
Bob Iger, chief executive of Disney, said the media giant planned to "significantly" reduce its investment in linear television to make its streaming division a sustainable and profitable one.
Last summer, Mr. Iger said he would take a "comprehensive" look at the entertainment giant's traditional TV assets, hinting at possible strategic options, including a sale.
Iger said on Wednesday that the company had analyzed and determined that cable TV "will not be a growth business, but it could be an important part of our ability to attract consumers."
Mr Iger said Dana Walden and Jimmy Pitaro, who run Disney TV studios, were tasked with reducing traditional online investment while managing the streaming business "seamlessly".
"both companies are managed by the same executives and their goal is to drive profit growth," he told a Moffett Nathanson investor conference.
An example of this duality is that Grey's Anatomy and Abbott Elementary School, broadcast on ABC, are "very soon" on the Hulu platform, or in some cases at the same time.
Iger said that the audience is different, ABC's audience is "older" than Hulu's. "We are basically attracting more audiences. We are amortizing costs! " He added.
While the executive said he still expects cable subscribers to be eroded, the sector will "continue to drive profitability because we are managing costs very effectively."
In general, "We are now comfortable with our hands because we are using these networks efficiently."
Cable networks have always been a pain point for traditional media giants because of the dismal advertising environmentBingo2023Income, coupled with the massive loss of pay-TV consumers.
Linear advertising and cable TV fees have been driving revenue growth until the phenomenon of "cable pinching". But as ad buyers now shift from traditional TV channels to digital channels such as streaming, advertising agencies are beginning to realise that they may never see the same level of return.
Disney said in its second-quarter results that ESPN's domestic operating revenue fell 9% year-on-year to 7%.Bingo202380 million US dollars, mainly due to the decline in revenue and users of the alliance.
Domestic cable network revenue from the entertainment sector has also appeared.Bingo2023In a similar situation, it fell 11% year-on-year in the quarter. The department's operating income fell by 18%. This has also been blamed on the alliance's lower revenue, as well as a decline in advertising revenue.
On the other hand, streaming achieved a turnaround in the direct-to-consumer (DTC) segment of the entertainment sector (including Disney+ and Hulu), with an operating profit of $47 million, compared with a loss of 5. 5% in the same period last yearBingo2023.87 billion US dollars.
However, most of the entertainment industry is now in trouble, and the company warned that it expected to lose money on some DTC results in the entertainment division in the third quarter. But Disney expects its streaming business to be fully profitable in the fourth quarter of this year.