Subscription Television Services

TAKEAWAY: SUBSCRIPTION TELEVISION SERVICES

Kraft:
You raised this—can you speak a little bit about the skinny bundle, what you see happening there?

Iger:
The skinny bundle—a lot of people, the majority of American households that get multi-channel TV—subscribe to an expanded basic bundle of channels, which is typically more than 100 channels for something in the neighborhood of—call it $100 a month. It varies.  It can be $75 a month. It can be 150 channels. But consider basically 100 for $100. There's a huge amount of value there because of all the quality on those channels and all the variety that's there.

But a lot of people, they feel that there are a lot of channels that they subscribe to that they don't necessarily want, and they'd like to take advantage of basically spending less on fewer channels. A lot of distributors have created what’s called a skinny bundle, which is a cheaper package, but it typically eliminates sports, because sports represents among the more expensive channels in that bundle. That resulted in a loss of subscribers for not just ESPN, but some of the other sports services, that was in the last couple of years a little bit steeper than Wall Street would have liked and that we would have liked. But that has plateaued, fortunately, and we don’t see that growing much right now.

But it is interesting to consider a world where consumers have the ability to pick and choose what the packages are that they subscribe to, and I think you’re ultimately going to get to a point where that authority shifts even more. Now, it could be that when it happens, consumers will ultimately opt for more versus less, but we'll see. I tend not to be skeptical about it. I just think it's important to be open-minded and realistic about it.