Applying Traditional Business Practices to the New World Can Be a Mistake, Says Disney's Bob Iger - JackMyers Think Tank

"The [ABC-TV] broadcast network is not a distribution platform anymore. Today, it's more a program studio," said Disney CEO Bob Iger last week at a Syracuse University Newhouse School breakfast event. "We use the network to develop content and then distribute that content globally," Iger added. Responding to questions from The New Yorker columnist Ken Auletta, Iger acknowledged that "you can't limit consumer access and can't stand in the way of technology," agreeing this places challenges on normal ways of doing business. He believes Disney and ABC are "challenging the present and past in obvious ways, but," he warned, "taking traditional media values and business practices and trying to apply them to the new world can be a mistake."

Accompanied by chief lieutenants Anne Sweeney, George Bodenheimer and David Westin, Iger said he expected ABC-TV and Disney/ABC Cable Networks would program a major hit on television and online simultaneously in the near future, while pointing out the revenue models for such decisions are uncertain. "Keeping it simple for the consumer is unbelievably important," he commented. "We need to take confusion out of the marketplace." Camp Rock, a 2008 Disney Channel movie featuring teen pop stars the Jonas Brothers, will air Friday June 20 on the Disney Channel, then on ABC-TV Saturday, on ABC Family Sunday and will become available on ABC.com on Monday. Iger said the company will generate $2 billion in digital revenues, half from online vacation packages and "half from everything else."

Commenting on the growth of virtual worlds and Disney's acquisition of the popular kids' world Club Penguin, Iger said the company will be developing additional virtual worlds that are inviting for kids and that offer significant social networking applications. "Social networking online is a form of entertainment, especially for young people…. We want to embrace technology to tell better and more compelling stories, and reach more people. Tools available to artists to tell a story are far better today."

Commenting on the impact of the economy on Disney, Iger explained the value of the dollar positively impacts on the company's travel and tourism business, and that there has been no negative impact on the company's advertising business. Only 20 percent of Disney's total revenues are generated by advertising, he pointed out, and "in this environment, we lag the economy, not lead it."

At the Traffic Audit Bureau "Eyes On" Conference in Boca Raton yesterday, Wachovia Capital Markets VP Equity Research Marci Ryvicker commented that national economic conditions could negatively impact on media companies and confirmed six percent revenue growth estimates for national and local broadcast television in 2008, but suggested recessionary economics would result in a downturn in 2009.