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Disney CEO talks progress on Sling, Vue, Hulu

Although Walt DisneyCo.'s cable networks saw a year-over-year drop in subscriber numbersduring the fiscal second quarter, company CEO Bob Iger remains confident that thenew skinny bundles being launched by various operators will ultimately drive growth.

Speaking during a May 10 earnings conference call, Iger notedthat Disney's networks have thus far launched on DISH Network Corp.'s Sling TV and Sony Corp.'s PlayStation Vue. "The numbers on both thoseplatforms have been encouraging and … they did contribute incremental subs for this last quarter,"he said. "We are not at liberty to give numbers for Sling or for Sony, exceptwe can say that we anecdotally were told that, after ESPN was included in theirpackage, they saw some very, very encouraging sign-ups or trends in terms of sign-ups."

Even more exciting, according to Iger, are the number of otherplayers coming into the market. "We are also in discussions with a number ofentities — some current distributors that are coming forward with new packages andsome completely new distributors," he said. "All have expressed an avidinterest in having ESPN and our other channels included in their initial offerings,and we are very, very encouraged by the … negotiations that we are having."

In general, Iger said Disney finds these products "veryattractive" because they offer customers more choice, greater mobility andhave strong user interfaces. "Those are all really important when it comesto today's environment," he said. "So we think, long term, given the discussionsthat we have and given the experience that we have had these last few months, wefeel good about what we are seeing.

Notably, one of the new offerings that will soon be coming tomarket is a subscription servicefrom Hulu that would allow users to stream shows from broadcast and cable TV networks."We think they have a great opportunity to become an [over-the-top multichannelvideo programming distributor] because they can leverage their current user baseand they also have a good user interface," Iger said. "I don't want tospeak for them fully but what they are looking at is a best of cable approach, whichI guess … would put them between the big expanded basic bundle category and someof the lightest packages that are available."

Iger's comments came after Disney reported its fiscal second-quarterresults, recording total revenues of $12.97 billion, up 4% from $12.46 billion inthe year-ago period.

Looking at the company's various segments, media networks revenuesslipped ever slightly to $5.79 billion from $5.81 billion in the year-earlier period,as increased broadcast revenues were unable to fully offset declines at the cablenetworks.

Parks and resorts revenues for the fiscal second quarter increased4% year over year to $3.93 billion, studio entertainment revenues for the quarterincreased 22% to $2.06 billion, largely driven by the strong performance of "StarWars: The Force Awakens" and "Zootopia." During the call, Iger saidthe studio was firing on more than all cylinders.

Consumer products and interactive media revenues for the quarterdecreased 2% year over year to $1.19 billion.

Overall, Disney reported net income attributable to the companyof $2.14 billion, or $1.30 per share, up from $2.11 billion, or $1.23 per share,in the year-ago period.

The S&P Global Market Intelligence consensus normalized EPSfor the just-ended quarter was $1.40, while the GAAP EPS estimate was $1.39.