April 17 (Bloomberg) -- Walt Disney Co. executives said consumers who listen to ESPN radio and interact with the sports channel’s websites spend triple the amount of time with the company as those who just watch the TV network.
Fans who take part in ESPN.com’s fantasy football or use the Watch ESPN app are with the company 17 hours a month on average, versus five hours for people who only watch TV. The data demonstrate that online and mobile offerings boost engagement with ESPN, as well as the potential for ad sales, executives told analysts today at ESPN’s offices.
“It’s exploded the misconception that digital media would cannibalize television,” Arthur Bulgrin, ESPN’s senior vice president of global research and analytics, said at the investor event in Bristol, Connecticut. “The overall time spent with ESPN media more than triples and at the same time TV viewing goes up. It’s a rising tide that floats all boats.”
Disney, the world’s largest entertainment company, is using the event to showcase ESPN, one of the company’s most profitable businesses, Chairman and Chief Executive Officer Robert Iger said.
A new studio ESPN plans to begin using next month for its flagship “SportsCenter” news show is a “great example of us investing in the value of a franchise, investing not only to continue to protect it but to continue to grow its value,” Iger said.
ESPN’s online offerings attract larger audiences than Yahoo Sports, Bleacher Report and NFL.com, Bulgrin said. Mobile use by customers also exceeds the time spent on desktop computers, he said. Watch ESPN’s typical user is 29 years old, compared with age 47 for the traditional TV viewer. The median income of $74,000 is 54 percent more.
TV networks, which accounted for more than half of Disney’s profit, face challenges from new video options, the migration of ad sales to online media and escalating costs for sports rights, ESPN President John Skipper said.
A deal Disney signed last month that lets Dish Network Corp. create a Web-based service with its programming will attract customers who don’t have pay TV now, rather than ones who trade down from an existing service, Skipper said. He expects more such deals.
“Pay television is going to remain a large business, though it will exist in a more complicated and dynamic atmosphere, which will require some evolution of our current business model,” he said.
Disney, based in Burbank, California, rose 1.3 percent to $79.99 at the close in New York. The stock has gained 4.7 percent this year.
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