Disney Net Income Drops 46 Percent as Ad Sales Slips


Increased affiliate revenue went a long way toward offsetting ESPN’s ad sales declines. All told, the cable nets grew their quarterly revenues 4 percent to $2.2 billion. Broadcast fell 2 percent, to $1.42 billion.

Interactive media revenues dropped 17 percent to $129 million. That figure does not reflect online revenue generated from various ABC, ESPN or Disney properties, as those incremental numbers are included in Disney’s media networks tally.

Last week, Disney bought a stake in YouTube rival Hulu, making it the third broadcaster to invest in venture. (CBS remains the lone holdout.) Iger told analysts that the decision to join Hulu was driven the “need to be where our consumers are going.” He also said that the offering could help combat piracy.

“If we don’t make our programming available online on a well-timed, well-priced basis, consumers will find it anyway,” Iger said. “it’s only going to grow in size from a consumption perspective, so it’s really important to establish ourselves there ... and to engage consumers wherever they are.”

Iger downplayed fear that the ‘Net will only serve to cannibalize traditional media platforms. “The movie theater isn’t going away, nor is broadcast television,” Iger said. “The same can be said for new media. ... Ultimately, we’ll be fairly compensated for it.”