Tags: Disney | ESPN | pay TV | Web

Disney's ESPN Holds Preliminary Talks for Web-Based Pay TV

Wednesday, 21 Aug 2013 03:16 PM

 

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Walt Disney Co.’s ESPN sports network has held “preliminary” talks to offer programming on a Web-based TV service like those proposed by Google Inc., Sony Corp. and Intel Corp.

An Internet TV service would have to pay as much or more than cable and satellite TV providers, ESPN President John Skipper said today at a press briefing at the network’s campus in Bristol, Connecticut. He declined to specify the companies ESPN has spoken with.

A Web-based service would have to buy “the whole suite of products,” Skipper said. “We’re not going to offer one-offs.”

Access to ESPN would give new online TV providers instant credibility and a foothold to compete with established players like Comcast Corp. and DirecTV. ESPN is the most valuable channel on pay TV, garnering the highest subscriber fees of any basic cable network, according to researcher SNL Kagan.

In addition to several channels, the network provides a Watch ESPN application for mobile devices and the Apple TV set-top box. Professional sports leagues won’t put a major event online only, Skipper said. They “all love to float the idea because there will be more competition for rights.”

Disney, based in Burbank, California, fell 0.2 percent to $61.75 at 2:40 p.m. in New York. The stock had gained 24 percent this year as of yesterday.

TV networks led by ESPN are Disney’s largest and most-profitable business, accounting for 46 percent of revenue and 69 percent of operating profit in the latest quarter, according to data compiled by Bloomberg.

Viacom Deal

Dan Race, a Sony spokesman, didn’t immediately respond to phone and e-mail requests for comment. The company is developing a Web-based pay TV service for its game consoles and TV sets, people with knowledge of the matter have said.

Tokyo-based Sony recently reached a preliminary agreement with Viacom Inc. for access to programming such as Nickelodeon and Comedy Central, a person familiar with the matter said last week. Apple Inc. is also working on a TV service.

Jon Carvill, an Intel spokesman, declined to comment. Lily Lin, a spokeswoman for Mountain View, California-based Google, didn’t immediately respond to a request for comment.

Sony American depositary receipts fell 0.9 percent to $19.77, while Intel, based in Santa Clara, California, retreated 1.2 percent to $22.26.

© Copyright 2014 Bloomberg News. All rights reserved.

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