2.5 Million Download Company's Content From iTunes

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NEW YORK (AdAge.com) -- Apple iTunes customers have ordered 2.5 million downloads of Walt Disney Co. programming since it became available three months ago, according to Disney President-CEO Bob Iger, who reported a profit for the quarter ended Dec. 31.
Photo: AP
Apple CEO Steve Jobs (left) and Disney President-CEO Bob Iger.
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That data is one of the first indications that consumers are ready to pay for broadcast network programming in return for mobility and convenience. The news may also give a boost to the rapidly expanding video-on-demand industry, which began life delivering movies and sports events.

Among the shows available for download include ABC’s “Desperate Housewives” and Disney Channel’s “That’s So Raven.” The programming is available, free of advertising, for $1.99 and plays on Apple's video iPod or a home computer. Disney makes the shows available after they air on their traditional outlets.

Bonding with Steve Jobs
Disney made the iTunes deal in October with Apple CEO Steve Jobs. Mr. Jobs has become tightly linked to Disney since he recently agreed to sell independent animation studio Pixar to Disney for $7.4 billion. Mr. Jobs owns roughly half of the studio and will join the Disney board when the deal is complete.

Speaking on an analysts’ call to discuss first-quarter results, Mr. Iger said: “In terms of monetizing content over new platforms and how high or how big that could be, my sense is that it can be very big and very high. We're not going to be specific about it. We're already starting to see some relatively decent revenue flow from some activity in this space.”

Disney Chief Financial Officer Tom Staggs, also on the call, indicated further deals were in the works. “In terms of other deals that we're looking at, there are many. We're really looking at everything. Some I think that will be quite significant but I don't really want to get that much more specific,” he said.

Consumer behavior
“We're watching consumer behavior change right before our eyes, and technology is causing that. And yet a lot of these businesses are very wedded to old-business models and practices and habits and relationships. ... It's tricky because you're putting relationships on the line and in some cases we're putting current business models on the line and so there's risk associated with it, and we're trying to find a balance.”

Separately, ABC also helped Walt Disney Co. record an 87% increase in operating income at the broadcasting segment, up to $234 million for the first quarter ended Dec. 31. The numbers came on the back of strong upfront commitments from advertisers and positive ratings for the once flagging broddcast network.

Cable down
Disney's cable operations fared slightly worse, down 15% to $372 million in operating income. The drop was explained by high programming costs at ESPN and additional marketing expenditure at the ABC Family channel.

Disney reported net income of $734 million, or 37 cents per share, up from $686 million, or 33 cents per share, from the year-earlier period. Revenue rose to $8.8 billion from $8.6 billion a year earlier.

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