Disney Unlikely to Offer Free Online Streams of ESPN Shows

Apr 11, 2006  •  Post A Comment

Walt Disney Co. President and CEO Robert Iger said Tuesday that the chances were slim that the media giant would ever stream ESPN shows on the Web for free.

Offering its shows online for no charge could jeopardize ESPN’s subscriber-fee revenue, Mr. Iger said during an investor call Tuesday.

“We are paid handsomely by distributors, and the sub fees we get from that are guaranteed for a fairly long period of time,” Mr. Iger said. “That’s almost an annuity for us. It’s an incredible source of revenue.”

Disney’s ABC broadcast network said Monday that it would begin streaming episodes of prime-time series “Desperate Housewives,” “Lost,” “Commander In Chief” and “Alias” for free on ABC.com in May as part of a two-month experiment to determine the viability of streaming ad-supported TV shows online. ABC has signed Ford Motor Co., Cingular, AT&T and others as advertisers.

The move has once again put Disney ahead of other media companies looking to distribute content on new platforms. However, some observers have suggested Disney’s action could spell trouble for distributors such as cable and satellite operators and ABC affiliates, all of which could potentially be bypassed by viewers if more TV shows are delivered through ABC.com.

Mr. Iger is sensitive to that issue, he said, but noted that because technology is moving quickly the key is to strike a balance.

“We want to continue with our traditional partners to create a lot of value,” Mr. Iger said. “We are not looking to abandon them, betray them or do anything that is designed to harm their business. But at the same time we can’t let fear of that relationship being challenged get in way of consumers going into other places [to access content]. It’s a tough balancing act.”