Bob Iger is not a man who speaks off the cuff, so his recent comments and subsequent ‘damage control’ about selling ESPN and ABC were not likely a misstep, but probably a more calculated means of generating interest and discussion over the state of traditional television.
Disney is a behemoth that owns most of the primary entertainment franchises of the last 60 years. It’s not wise to bet against the house of the mouse, but Iger knows how to read the market. He knows ESPN and ABC are widely respected sources of news and information.
They are rarely (if ever) criticised for the content they present, although they are sometimes criticised for the financial moves they make — guilty of either overpaying for talent or poorly mismanaging the recent layoffs of high-profile talent, as ESPN did with Jalen Rose.
Strategy issues
Those are management issues and not strategy issues, and Iger is dealing with strategy issues.
The larger question is not whether ESPN and ABC are valuable entities — it’s what format the two should be focusing on to succeed for the next 20 years.
ABC is a news outlet, and news outlets have had their fair share of challenges these last 15 years. That being said, ABC is the benchmark for news coverage and has been so for a long time, rarely venturing into partisan territory and generally maintaining a fair and balanced approach.
You can find people to argue with that stance, but I think that would be unfair.
On the other hand, sports is one of the only remaining ‘appointment viewing’ opportunities left. People still watch sports live, and ESPN offers a lot of live sports.
Digital streaming?
Its coverage of the NBA by itself is enough to get people tuning in, if not for the live cornhole and axe throwing competitions trotted out for viewing in the shoulder season of sports between NFL and NBA. Here ESPN is growing beyond what it should be. Cornhole is not engaging television.
Should ESPN and ABC be maintained as primary network and/or cable news channels or are they better off going wholeheartedly into digital streaming? That feels like the bigger strategic question. Is this the tipping point for major media where the cable networks lose the focus of ESPN?
Is there a better model of simply making ABC and ESPN free to anyone with an internet connection, and relying on different models for advertising to drive revenue?
Streaming wars
Maybe having ESPN+ as a streaming service doesn’t make sense, and it should simply focus on garnering the broadest possible audience and monetising that. After all, that’s what the original three networks did, and that worked for a very long time.
The streaming wars are fascinating because they hinge on subscriptions, but what Bob Iger is likely realising is that we can get news and highlights anywhere, at any time. Just check out YouTube and you can likely see what you want quickly.
ABC and ESPN are personality-driven, and maybe the audience won’t pay for personality, but they will live with commercialisation of the content if they don’t have to pay for it.
Commercial breaks
Of course, interruptive commercial breaks are less and less effective (and more annoying), so there will certainly be a change in the model of how that content is monetised. If they figure out the model, then it is all about the audience. Content wins and audiences bring the bagels (just go with it, it’s fun).
Whether someone buys ABC or ESPN is up for discussion. Whether the sports leagues invest in ESPN is up for discussion. Everything is up for discussion, and it feels like these are discussions that could have ramifications across the industry for many years to come.
What are your thoughts on what Bob Iger is doing?
This story was first published by MediaPost.com and is republished with the author’s permission.
Cory Treffiletti is SVP at FIS. He has been a thought leader, executive and business driver in the digital media landscape since 1994. In addition to authoring a weekly column on digital media, advertising and marketing since 2000 for MediaPost‘s Online Spin, Treffiletti has been a successful executive, media expert and/or founding team member for a number of companies, and published a book, Internet Ad Pioneers, in 2012.
