The talk leading up to this week's Disney (DIS) -) earnings release has been about the company potentially being up for sale to Apple, but the word from the House of Mouse's earnings call has been about the 11.7 million subscribers it lost across its direct-to-consumer business.
While a 5% decrease in subscribers to 220 million is certainly concerning, the long-term talk around Disney has been what it plans to do with ESPN.
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Last month, CEO Bob Iger made headlines after he told CNBC that the company was looking for a "strategic partner" for the sports network and that he was open to selling an equity stake in ESPN.
This fueled speculation about Disney's long-term commitment to the network. But Iger seemed to put his full weight behind ESPN during the company's conference call.
"Overall, we're considering potential strategic partnerships for ESPN, looking at distribution, technology, marketing and content opportunities where we retain control of ESPN," Iger said.
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ESPN saw ad revenue in the quarter increase by 4%, which the company said demonstrated the "relative strength of sports."
So what does Disney have planned for ESPN in the future?
"I think it's safe to assume we ultimately turn this into a streaming business," Iger said.
And right now the company search for strategic partners is tied to its recognition that a streaming version of ESPN will need a lot more content to justify its price.
"So when we look ahead and we see a business that will be a direct — primarily a direct-to-consumer business — we obviously have an eye toward how much content do we need in order to make that a successful business. That obviously ties to what the pricing model need to be, and actually, how much distribution support we need," Iger said.
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