Disney Cable Group Looks to Video-On-Demand for Growth
BURBANK, Calif. (Reuters) -- Walt Disney Co.'s Disney Channel may be zip-a-dee-doo-dah dandy and its ABC Family channel may be down-home delightful, but neither perks up corporate mouse ears these days like video on demand. Indeed, VOD services, as they are called in the industry, could well be the next major growth engine for Disney's cable TV division in the new century, said Anne Sweeney, president of ABC Cable Networks Group, which oversees most of Disney's cable holdings. "One of the great things about cable is its ability to narrowcast," Sweeney told Reuters, explaining cable's ability to target smaller and smaller audiences down to the individual viewer. "In this new world where we're looking at digital deployment (of cable television), you're able to take narrow casting to its next level." That next level could well be VOD, as Disney and other major television program and movie owners scramble to find the next big thing to be delivered over a new generation of super-fast high-speed cable systems installed over the last decade. While the Burbank, Califor-nia-based company is better known for its movies, theme parks and its struggling ABC television network, its cable television holdings have quietly grown into its second-biggest breadwinner in recent years, second only to theme parks. Disney's cable divisions, which include the wildly popular ESPN sports network, generated about $1.23 billion in operating income for the company in its fiscal 2001, or about 30 percent of its total of $4.04 billion for the year. Only the parks and resorts division provided more, with about $1.7 billion in operating income. Sweeney said Disney is talking to all of the major operators of cable TV systems about new video-on-demand services, but declined to provide specific names. Overseas, ABC Cable Networks Group oversees a crop of international Disney-branded channels that has grown from zero to 20 over the last five years, making the area another primary growth engine for Disney's cable division. That overseas investment has produced double-digit growth in revenues and operating income in recent years, and is expected to turn a profit in 2003. International is not only a primary growth area, but also a huge potential source of material for future cable shows, Sweeney said. She pointed to the Australian show "The Wiggles" as a recent case of the origins of a Disney Channel show outside the United States.
BURBANK, Calif. (Reuters) -- Walt Disney Co.'s Disney Channel may be zip-a-dee-doo-dah dandy and its ABC Family channel may be down-home delightful, but neither perks up corporate mouse ears these days like video on demand. Indeed, VOD services, as they are called in the industry, could well be the next major growth engine for Disney's cable TV division in the new century, said Anne Sweeney, president of ABC Cable Networks Group, which oversees most of Disney's cable holdings. "One of the great things about cable is its ability to narrowcast," Sweeney told Reuters, explaining cable's ability to target smaller and smaller audiences down to the individual viewer. "In this new world where we're looking at digital deployment (of cable television), you're able to take narrow casting to its next level." That next level could well be VOD, as Disney and other major television program and movie owners scramble to find the next big thing to be delivered over a new generation of super-fast high-speed cable systems installed over the last decade. While the Burbank, Califor-nia-based company is better known for its movies, theme parks and its struggling ABC television network, its cable television holdings have quietly grown into its second-biggest breadwinner in recent years, second only to theme parks. Disney's cable divisions, which include the wildly popular ESPN sports network, generated about $1.23 billion in operating income for the company in its fiscal 2001, or about 30 percent of its total of $4.04 billion for the year. Only the parks and resorts division provided more, with about $1.7 billion in operating income. Sweeney said Disney is talking to all of the major operators of cable TV systems about new video-on-demand services, but declined to provide specific names. Overseas, ABC Cable Networks Group oversees a crop of international Disney-branded channels that has grown from zero to 20 over the last five years, making the area another primary growth engine for Disney's cable division. That overseas investment has produced double-digit growth in revenues and operating income in recent years, and is expected to turn a profit in 2003. International is not only a primary growth area, but also a huge potential source of material for future cable shows, Sweeney said. She pointed to the Australian show "The Wiggles" as a recent case of the origins of a Disney Channel show outside the United States.