CMO Today: Disney’s Digital Strategy in View – Wall Street Journal
COMING INTO VUE: When evaluating the seemingly never-ending list of new options for cord-cutters, the question many cable devotees start with is, “What’s the deal with sports?” And often, the answer is, “Well, it’s complicated.” Several sports networks have been available on Sony Corp.
’s new PlayStation Vue streaming TV service, with one glaring exception: ESPN. But Sony has now fixed that by signing a deal with Walt Disney
Co. to distribute ESPN, ABC, and other Disney networks, reports CMO Today. Sony and Disney haven’t announced a launch date just yet, and Vue is only available in select markets, so the immediate impact may not be so huge. Disney CEO Bob Iger made it clear on the company’s earnings call which side he thought had the leverage in the Disney-Sony negotiation: “They came to us to negotiate a deal because it was clear the product that they had launched was not penetrating the market as much as I think they were expecting,” he said. But he also said that new entrants like Sony can challenge established cable and satellite companies and appeal to young people.
DIGITAL DISNEY: For Mr. Iger, highlighting Disney’s new emphasis on digital distribution is important as the media powerhouse tries to calm investors’ fears about the future of pay TV. Recall that last quarter, Disney’ disclosure that it was losing some cable subscribers spooked Wall Street in a big way, triggering a widespread media stock selloff. This time, while Disney said there were subscriber declines at certain networks, there was some good news to report in overall results. Revenue for Disney’s cable networks, which include ESPN, jumped 12% year-over-year to $4.25 billion and operating income rose 30%, The Wall Street Journal reports. Mr. Iger noted that there are ways to strengthen the traditional pay TV providers’ offerings — the same ones he says the new entrants are challenging — such as making available past seasons of TV shows. “There’s no reason to panic,” Mr. Iger said, while also acknowledging that there is “more competition for people’s time.”
SCATTERED APPLAUSE: The ad sales people at TV networks don’t have it easy. Viewership is declining in ways that appear to be structural and digital media outlets are licking their chops to steal away TV ad dollars. And yet, the TV ad market isn’t as awful as you might think. In this week’s round of media company earnings, executives highlighted that the scatter market–in which advertisers buy TV ads close to when they air–has been decent, reports CMO Today. CBS Chief Executive Les Moonves called the recent scatter market “very robust.” Most of the TV companies in question, including CBS, Comcast Corp.
and 21st Century Fox, enjoyed single-digit percentage increases in TV advertising. Let’s not get too excited here — that’s not the pace of growth these giant conglomerates are looking for in the long-run. But for those fearing a total free-fall driven by digital migration, it’s good news.
TOUGH TIME: If we told you that a company’s digital ad revenue jumped 22% during its most recent quarter, that would sound impressive. If that company had been in the online ad game for nearly 20 years and posted that growth despite its maturity — that’s even more impressive. Unfortunately, for the company in question, Time Inc.,
that expanding digital business still isn’t nearly big enough to overcome the problems the magazine publisher faces in its much larger print business, WSJ reports. While Time Inc. generated $79 million in digital revenue in the quarter, its print and other ad business slid 12% to $319 million. Yes, Time Inc. has been making some smart moves of late, acquiring younger-skewing, pure-play digital brands like Hello Giggles. But this turnaround is going to take some serious Time.
The ad tech firm company Neustar has agreed to buy MarketShare Partners, which provides brands with data and analytics, for $450 million [CMO Today]
Robert Kyncl, who has run YouTube’s content business for the past few years, will now also oversee business development and partnerships for Google Play [Billboard]
YouTube and the duo behind its popular Smosh channel are collaborating on a new scripted series sponsored by Schick Hydro [Ad Age]
Time Inc. CEO Joe Ripp said he is disappointed in ad revenue coming in from Apple News [Politico]
A small collection of technology giants, including Facebook and Amazon, increasingly dominate the digital economy [WSJ]
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