M+E Daily

During their latest round of quarterly earnings calls, studio executives offered a mostly positive take on over-the-top (OTT) services, with Disney CEO Bob Iger offering the most recent praise of a trend that continues to prove disruptive to pay TV providers.

During Disney’s May 10 second quarter fiscal call, Iger sounded especially optimistic about the opportunities provided by OTT services Sling TV (from Dish Network) and Sony’s PlayStation Vue. Disney was a launch partner for Sling and Vue, and currently offers ESPN, ESPN 2 and the Disney Channel on both services.

“The numbers on both those platforms have been encouraging,” and “they did contribute incremental” total subscriptions for ESPN in Disney’s second quarter (ended April 2), Iger said, without providing exact numbers. After ESPN was included in the Sling and Vue bundles, those services “saw some very, very encouraging signups …” he said.

Disney is also “in discussions with a number of entities — some current distributors — that are coming forward with new packages, and some completely new distributors,” Iger added. Those unnamed companies “expressed an avid interest in having ESPN and our other channels included in their initial offerings, and we’re very, very encouraged by the discussions/negotiations that we’re having,” Iger said. “They all want ESPN … These products are very attractive because they’re offering consumers more choice.”

Iger’s upbeat take on OTT and ESPN subscribers stood in contrast to the more cautious comment he made last year, when he pointed out that while ESPN was losing subscribers, the inclusion of ESPN in “skinny” bundles (like Sling TV) wasn’t necessarily related to the decline.

Meanwhile, Hulu — which Disney jointly owns with Fox and NBC Universal — recently revealed it will launch a virtual multiple system operator (MSO) service sometime next year. The company will provide broadcast and cable channels to consumers for a monthly fee as part of its plan. Currently, Hulu only provides reruns of individual shows from those channels.

Hulu has a “great opportunity to become an OTT” multichannel video program distributor (MVPD) because it “can leverage” its current user base and also has a good user interface, Iger said on the May 10 call. Hulu is looking at a “best-of-cable approach” that would put it “between the big, expanded basic bundle category and some of the lightest packages that are available like some of what Sling has put out,” he said. “We feel really good about the opportunity. We’re also fully aligned with our partners at 21st Century Fox on the strategy,” he said. Disney also doesn’t see “any negative impact whatsoever” with it going into the business of distributing its own channels, he said, adding several of Disney’s distribution partners are content owners and creators, including Comcast.

Iger didn’t shed any new light on the exact launch timing or pricing of the upgraded Hulu service. But, he did note: “we like their strategy from a pricing perspective.” The service is expected to launch in the first quarter of 2017 at $40 a month.

Although Disney hasn’t participated in Sling’s new multi-stream service offering —because it wasn’t able to agree to a deal with Dish — Iger said he recently talked to Dish CEO Charlie Ergen, and Disney is now “engaged in discussions with him about possibly being included in the new product in the future.”

Fox

Fox said last month that it’s participating in Sling’s new multi-stream service, with all its entertainment and sports brands. That offering is “priced well below the fully bundled MVPD offering that some customers find hard to digest,” 21st Century Fox CEO James Murdoch said on an earnings call May 4.

Fox also confirmed that it’s participating in the new Hulu service. It will allow Fox to provide similar services and products to new entrants or established MVPDs, “encouraging and enabling innovations downstream, creating a distribution infrastructure that allows us to monetize more effectively and all the while grow our direct to consumer capability,” Murdoch said. The company’s overall goal is “to make our programming more available, not less,” he said.

Time Warner

Time Warner is expanding production for cable and OTT services, CEO Jeffrey Bewkes said during his company’s May 4 earnings call. “To capitalize on the rapid shift to on-demand consumption and broadband delivery of video, we’re focused on innovation both in the type of content we produce and how we get it to consumers,” he said.

The company continues to see “significant growth in both users and usage of our digital platforms, and we expect that to continue with our recent expansion” of the HBO Now OTT service to Microsoft’s Xbox and to Samsung’s smart TVs, Bewkes added. The company is expanding the reach of HBO’s OTT products internationally as well: In the first quarter (ended March 31), the HBO’s Latin America division launched an OTT service in Mexico, and HBO announced plans for OTT launches later this year in Spain, Brazil, and Argentina. “That’s all part of a broader push across the company to develop new services and capabilities,” Bewkes said.

Viacom

Viacom’s networks and the younger demographics they attract continue to favor the company, CEO Philippe Dauman said on an April 28 earnings call. Its networks, including MTV and Comedy Central, remain “much desired” for OTT streaming services from new entrants in the industry, as well as those developed by traditional distributors like Sling, he said.

“While cable penetration continues to decline across the industry, the penetration of connected devices is growing at a double-digit clip,” said Dauman. Thirty-four percent of broadband households subscribe to two or more paid internet video services, he said.

Viacom continues to come up with new ways to meet challenges presented by the growing shift to alternative TV viewing services, Dauman said. One new strategy is a deal with Roku, in which Viacom will be able to “leverage aggregate data from Roku, enabling sophisticated ad targeting at an unprecedented scale in the TV environment,” he said.

Among connected device owners, Roku homes have the largest reach, average days used and hours used per day, he said. Roku usage is also “greater than Xbox, Chromecast and Apple TV combined, and that lead is accelerating,” Dauman said.

Although Viacom withheld the Nickelodeon network from the Sling platform, Dauman noted: “We will evaluate that as it goes forward.”