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Disney is wisely preparing for a cable-less future.
The media juggernaut is developing two Netflix-style streaming services to be released over the next two years. The first is Disney’s anticipated sports service for ESPN, the crown jewel of cable TV. The second, geared toward families, will be stocked with the latest Disney and Pixar releases, which won’t be heading to Netflix anymore, as well as new original programming.
But there is still at least $8 billion a year to be made from pay-TV programming—revenue that could now be at risk because of Disney’s move to compete against companies for which it’s long provided content.
Companies like Charter and Comcast pay top dollar to carry ESPN and Disney’s other cable channels. Cable providers may not be willing to pay more when Disney also sells packages that cannibalize their businesses.
Both services will be adds ons to, and not replacements for, Disney’s existing TV channels, CEO Bob Iger said on a call with analysts this week.
It’s not just the future of the industry Iger is securing—it’s his legacy. Navigating the choppy transition from traditional TV to digital is one of the CEO’s last big challenges before he retires in 2019. —Ashley Rodriguez
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