VOD, ITunes, Online Video All Strong for Walt Disney Co.

At Credit Suisse: CFO Calls TV Market 'Solid'

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NEW YORK (AdAge.com) -- Walt Disney Cos.' chief financial officer, Tom Staggs, described the current TV ad market for the company as "solid, if not spectacular." Disney's ABC network won its first November sweeps in seven years in the advertiser-coveted 18- to 49-year-old demographic.
Disney CFO Tom Staggs said ABC had 30 advertisers participating in its online video offering, which the company would now make available year round.
Disney CFO Tom Staggs said ABC had 30 advertisers participating in its online video offering, which the company would now make available year round.

Mr. Staggs, speaking at yesterday's Credit Suisse First Boston conference, said pricing for remaining airtime, known as the scatter market, was running at "mid-single digits" above prices earned during the spring's "upfront" ad-buying and -selling period.

Program success
ABC has broadened its programming success this year, adding hits "Ugly Betty" and "Brothers & Sisters" to its roster and expanding interest in the already popular "Grey's Anatomy" by moving it from Sunday night to Thursday night.

Mr. Staggs, speaking to reporters after the event, said ABC now had 30 advertisers participating in its online video offering, which the company would now make available year round. He said that only about half of those advertisers were taking advantage of interactive capabilities.

The broadcast networks, including ABC, have pushed to move from programming ratings to commercial ratings, a debate that has brought the various factions -- networks and marketers and their media-buying agencies -- to a standoff over how to execute such a move. When asked about commercial ratings, Mr. Staggs said: "We hope we can solve the issue. If we don't see things happen this year, we'll be having the same conversations about the live-plus-same-day or live-plus-seven that we had last year."

Those terms refer programming viewed on digital video recorders by people who watched programming as it aired -- that is, live; those who watched it using a DVR on the same day (live plus same day); and those who watched programming by the seventh day after it originally aired (live plus seven days). A focus of debate has been how much to charge for ads not viewed live.

$25 million from iTunes deal
Disney's video-on-demand business has seen growth this year, with the company fresh off a new deal with Comcast and in talks with Time Warner Cable to offer select programming. Mr. Staggs said Disney's iTunes deal had reaped $25 million in revenue in its first year. He said the offering was clearly not cannibalizing DVD sales. "'Cars' is the second biggest download on iTunes," he said, adding that DVD sales of the Disney-Pixar movie were reaching a similar level 2004's "The Incredibles," even though "Cars" was not as big a box-office success.

Disney, which is expecting digital revenue to hit $500 million this year and around $700 million next year, is likely to see the biggest bounce come from its download business, Mr. Staggs said: "It will be one of the biggest growth areas and advertising is going to be a very strong story."
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