Disney has found its distribution equilibrium when it comes to managing linear and streaming TV assets.
Dana Walden, co-chair of Disney Entertainment, outlined the company’s strategy of threading programs through the Magic Kingdom’s assets during a wide-ranging Q&A with Ken Ziffren, co-founder and partner of Ziffren Brittenham, at the annual UCLA Entertainment Symposium.
In her keynote address, Walden made it clear that Disney at present has no plans to divest its linear cable channels in the manner that is in the works at NBCUniversal and Warner Bros. Discovery. Ziffren took Walden step by step through the company’s distribution strategy and long-term vision for managing the declining linear sector that still generates a lot of cash flow and profit for the Mouse House.
Walden cited the Big 5 of Disney legacy linear channels — Nat Geo, FX, Freeform, ABC and Disney Channel – as programming engines for streamers Disney+ and Hulu. The home run for Disney at present are shows that have appeal to live linear platforms that tend to draw an older audience but also connect with viewers in an on-demand format of streaming.
“All of that programming is deeply embedded in our strategy for streaming,” Walden told Ziffren. “It’s a pipeline of programming we’re able to optimize and monetize along multiple platforms.”
Walden emphasized that there is little duplication of audience between platforms. That allows Disney to make the most of its production and marketing expenditures. “We are distributing to fresh eyes with each one,” she said.
The same is true at the local level for Disney’s eight owned-and-operated ABC affiliates in such markets as New York, Los Angeles, Chicago and Philadelphia. Local news and other localized content make those stations invaluable for a company like Disney with so many components.
“Notwithstanding that it’s obviously a declining ecosystem, those stations are highly profitable and very high-margin business,” Walden said. “For a lot of viewers, they are a daily touch point with the Walt Disney Company. We promote our parks, our cruise ships, our films that are being launched, our shows. And we feel comfortable for quite a while that maintaining well-run stations in very high value markets is the right strategy for us.”
As the pair talked through the basics of running Disney’s enormous TV operation, Walden and Ziffren demonstrated a natural rapport that comes from a long relationship. Walden said she first met Ziffren at age 14 through her friendship with Ziffren’s daughter. As she settled in for the hourlong Q&A, she acknowledged that in her mind she was thinking, “This is my friend Laura’s father,” she joked.
Among other topics discussed:
** Walden detailed a formative experience from earlier in her career when she ran 20th Century Fox Television, long before Disney acquired Fox. One year after the studio broke industry records by nabbing some 28 series orders from broadcast networks, Walden was taken to task on the plane ride home by her boss at the time, former News Corp. president Peter Chernin.
“He said ‘Congratulations, you’re breaking our business. If you’re just network order-takers, you’re not creating content that is going to be meaningful and stand the test of time and going to carry this company into the future.’ He was exactly right,” she said. “The long tail of high-quality stories – it is an annuity for life for any company lucky enough to produce them.”
** Walden offered some behind-the-scenes insight on Disney’s recent carriage agreement deal with cable giant Charter Communications. The deal makes Hulu content available to Charter subscribers, and it represented a win for Disney in that Charter restored linear distribution for several smaller channels (such the pre-school focused Disney Junior) that had been dropped from Charter’s lineup several years ago.
“It’s a great example how a company like Disney has assets that exist in linear and in streaming can work with an MVPD partner like Charter,” she said. “The economics worked out based on the assets we were able to shift around and how they’re packaged on Charter.”
** Ziffren pressed Walden on rival companies and shows that she admires. Netflix’s “Adolescence” and HBO’s “The White Lotus.” “In terms of strategies, it’s hard not to be impressed with Netflix,” she said.
(Pictured: Ken Ziffren and Dana Walden speak June 27 at the 49th UCLA Entertainment Symposium)
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