Disney CEO Robert Iger said he doesn't want to repeat the mistake of the music industry by ignoring the clout of more empowered consumers. "Consumers have more power in how they access media," Iger said. "We have to pay attention to that. It's obvious the music industry didn't pay enough attention, and had a substantial reduction in revenue and increased piracy."
D co-host Kara Swisher asked Iger if in the Internet age of more empowered consumers, the network affiliates, Wal-Mart, cables companies, writers and actors who work with Disney and other networks will be less empowered.
"A lot of people are troubled by a traditional content company moving to new platform. Affiliates may end up with opportunity they never had before," Iger said. Ten ABC affiliates have been set up to stream ABC program content within their frame, and to sell ads around it. ABC sell the ads within the programming, Iger said. Disney is also talking to Comcast about showing the same ABC television programming, such as "Desperate Housewives," on comcast.net or in a video on demand environment. Iger said he doesn't expect to stream ESPN's entire service in a bypassed manner (satellite and cable fees are substantial, as Comcasts' steven Burke pointed out), but some content will be available, such as on espn.com and via mobile services.
Iger's goal is to have a blend of business models and be platform agnostic. Getting all the parties to agree to models is another story. "We have a lot of mouths to feed. When there is an increase in media consumption, you just have to find ways to track consumption and share revenues....In the end it will work out because it's in the best interest of all creators."
Disney is focused on building its brands as a differentiator, not in aggregating lots of external content or user generated content. "User generated content doesn't hold a candle to professionally generated content," Iger said. "It's fascinating...there's nothing wrong with it...but it's not our primary business."
Iger noted that during his stint at ABC, he greenlighted what become the first hit show with user generated content--"America's Home Videos"--which beats 60 Minutes in the ratings game on Sunday nights. He also noted that about a quarter of the 40 million people who go to Disney theme parks every year have video cameras, and Disney could potentially turn that into fodder for Disney.com, which he said is the company's network of the future--interactive with music, games, shopping, communities, photos and video.
Iger is confident that the three main Disney properties--ABC, ESPN and Disney--can play what he called a "quality branded content game." He said the TV platform is great platform for mass consumption, generating $3 billion in revenue, which can be used to support the creation of more content that Disney owns and that exploits content on multiple platforms, devices and territories around the world. "It's hard to start a hit on the Internet, not that it can't be done," Iger said. He explained that brands like Amazon, eBay, Yahoo and Google were created relatively quickly, but that traditional platforms have a similar ability to create brands and should not be counted out. "We'll see continued fragmentation, with consumers with more kinds of devices."
Iger isn't willing to allow consumer to have it their way, however, releasing movies in theatres, DVD and on demand simultaneously. "Watching the Pirates of the Carribean on a big screen is great experience," Iger said, and Disney theatrical releases won't be available for immediate download. The theatre experience will be improved by digital technologies, but so will the home theatre experience.
Over time, competition in the market will drive toward more simultaneous release.
Iger was asked about board member and largest Disney shareholder Steve Jobs. He was duly circumspect in his answer, saying that he turns to Jobs on a fairly regular basis for advice, and that the Apple Chairman and CEO is enthusiastic about the potential for Disney.
See also: Rafat Ali's D coverage at PaidContent.org