Disney CEO Touts Net

LOS ANGELES Message to cable operators from Robert Iger: VOD is too complicated.

The Disney CEO said Thursday that cable TV companies need a Google-like search mechanism if VOD is to reach its full potential. Type in “rat DVD” at Google and you’ll easily find Ratatouille, he said, but that’s far from the case for VOD.

He said he’s had better luck at Time Warner Cable’s Web site when seeking programming than with a TV remote control: “And if I want to find something VOD-related, oh my God!”

Iger was the keynote speaker Thursday at the Sanford C. Bernstein Media Symposium, where he got laughs describing a typical VOD search: “I have to go to page 3, a-b-c-, yellow-green-purple, backspace three times, then I had to do a cartwheel and wash my face.”

Iger also took a moment to criticize a recent New York Times editorial—and others who complain of rising prices—that called for more government regulation in the cable television industry. What’s usually missing from the debate, he said, is that programming has been progressively improving over the years. “When you provide more value, the price should go up,” he said.

Iger, though, spent most of his time touting the Internet as “a great medium for entertainment,” stressing that Disney must think about entertainment in nontraditional ways in order to fully benefit.

That’s why Disney has delved into virtual worlds in a big way, purchasing Club Penguin, launching Pirates of the Caribbean Online, building DisneyFairies.com and, within about a year, creating an online virtual world focused on the Pixar-Disney movie Cars.

As for traditional content over the Internet, a business that is front and center in the ongoing Hollywood writers strike, Iger said it’s too early to gauge revenue and profit potential.

One hurdle is bridging the gap from computers to TV screens, which is “really important” if the nascent industry is to meaningfully take off, he said.

Apple, run by top Disney shareholder Steve Jobs, has one solution in Apple TV, a set-top box for playing iTunes content on TV sets. That product, though, hasn’t captured the attention of consumers the way that the iPod or iPhone has. Amazon.com and TiVo also have a solution: renting movies at Amazon and showing them on TV screens via a TiVo box. But neither Amazon nor TiVo share user data, so it’s tough to gauge the popularity of that initiative.

Affiliates and big-box retailers that balked at the idea of Disney and others selling and renting online downloads have gotten used to the idea, Iger said, with affiliates benefiting from ad sales and retailers from selling iPods and other devices necessary for viewing online media.

“These, in general, are enlightened companies,” he said. “They see how much of their own business is migrating online.”

Iger also said DVDs would not be going away anytime soon. “Kids like to watch our products 50-200 times,” he said, noting that parents aren’t ready to turn their computers over to their young children so that they can access the family’s video library.

Responding to a question, Iger dismissed the notion that user-generated content, while popular, was much competition against Disney’s content.

“I’m the one who put America’s Funniest Home Videos on in 1989,” he joked. “I was stupid, though, I should have created YouTube.”