Iger said Disney's acquisition of BAMTech enabled the company to launch a direct-to-consumer serviceGETTY IMAGES
Disney Chair & CEO Bob Iger believes ESPN eventually "will be a far more direct-to-consumer product." Appearing on "The Bill Simmons Podcast," Iger said launching ESPN+ and "investing to grow that by buying more programming for it, giving them the resources necessary, we're growing it nicely." But he added the OTT service is "still relatively small, both economically and from a subscriber perspective," compared to the linear product. Iger said when he decided to acquire BAMTech from MLB in '17, it was to "enable us to launch a direct-to-consumer service." When he gave his pitch to the Disney BOD for funds to purchase BAMTech, he "presented it in the context of what ultimately would be a complete pivot strategically, and that was launching a direct-to-consumer ESPN and Disney-branded service." Iger said if they had not changed strategy, then in last week's earnings call, he "would have been talking about more ESPN erosion and I wouldn't have been talking about Disney+ growing subs and ESPN+ growing subs." Iger: "If you're running a business in a dynamic world, specifically in a dynamic industry like the information and entertainment industry, and you try to maintain any level of status quo ... you'll eventually become irrelevant. So unless you're in the business of changing with times or ahead of the times, you're destined to fail." Meanwhile, Iger said ESPN's "base business, the multi-channel cable and satellite business," while it is "under some duress from all this disruption, is still delivering a fair amount of profitability" ("The Bill Simmons Podcast," THERINGER.com, 2/10).
DOING THE HEAVY LIFTING: Endeavor President Mark Shapiro's cell phone practically blew up soon after Iger highlighted the UFC as a main driver for ESPN+ subscriber growth during last week's earnings call. The subscriber count for ESPN+ rose to 7.6 million as of Feb. 3, up from 1.4 million in December '18. It did not surprise Shapiro that the UFC was the only sports property Iger mentioned on the call. Shapiro: "It's the UFC that is driving sign-ups by every metric we look at. It's not even close." Shapiro referenced the Jan. 18 UFC card that featured Conor McGregor-Donald "Cowboy" Cerrone, which had 1 million PPV purchases and brought 500,000 new subscribers to ESPN+ (John Ourand, SBJ Media).
