FierceCable reports that, in a recent conversation with CNBC's Squawk Box, Disney CEO Bob Iger said that the company's ESPN unit will eventually go a la carte, but that decision is likely more than five years away. The popular sports network demands a premium price to license as part of a pay-TV bundle; but, as the bundle approach begins to disintegrate, the company will need to explore other strategies, including an a la carte service similar to HBO Now.
Walt Disney Company CEO Bog Iger said his company's highly profitable ESPN unit will eventually go a la carte as pay-TV's bundling infrastructure gives way. But that decision is still more than five years away, he added.
"If we end up seeing more erosion in the so-called multichannel bundle, quality will win out," Iger told CNBC's Squawk Box. "While the business model may face challenges over the next few years, long term for ESPN ... they'll be fine."
ESPN is already seeing a decline in its user base: The national sports network has lost 7.2 percent of its pay-TV base since 2011, and now counts around 93 million subs.
The costs for its programming, meanwhile, are rising faster than anywhere in the pay-TV ecosystem. ESPN is paying around $2 billion a year to the NFL just to show Monday Night Football, for example, and another $1.7 billion a season to present NBA games.
Meanwhile, ESPN charges $6.61 per subscriber, on average, making it far and away the most expensive programming network to license, among both broadcast and cable channels.
To read the complete FierceCable article, click here.
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