Bob Iger, CEO of The Walt Disney Company (Photo: cnbc.com) Bob Iger, CEO of The Walt Disney Company (Photo: cnbc.com)

ESPN to Launch Standalone Service in 2017

During Disney's financial results presentation, CEO Bob Iger announced the company "will be launching a direct-to-consumer sports service sometime in 2017."

After the revelation that ESPN is losing traditional pay TV subscribers, Disney is jumping into the new video consumption trends and announcing plans to launch a digital direct-to-consumer service for the sports network.

"We will be launching a direct-to-consumer sports service sometime in probably calendar 2017," he said on the company's earnings call Tuesday.

The new service will use technology from BAMTech, the Major League Baseball spinoff in which Disney invested US$1 billion last year.

"We're very excited about what the potential of this is long term, both for the company and for third parties who can use the product because the technological side of it is so strong in ways that are value enhancing for them as well," he said.

The new service will roll out slowly, since Disney has to respect the contracts it currently has.

"We have to be careful because we have existing agreements and existing relationships and a lot of value still being reaped from the traditional distribution relationships. But I can tell you that it is our full intent to go out there aggressively with digital offerings direct to the consumer for ESPN and other Disney-branded properties," Iger said.

"You have to be willing to either create or experience some disruption as we migrate from what has been a more traditionally distributed world to a more modern or more non-traditional distribution world," he added.

"And some of that we're going to end up doing to ourselves, meaning we understand that there is disruption, but we believe we have to be a disruptor too."

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