Bob Iger interview with CNBC after Q3 2017 earnings: full transcript

Disney CEO Bob Iger spoke to CNBC’s Julia Boorstin about the company’s earnings report on Tuesday, along with also also discussed the company’s plans to withdraw its movies via Netflix. Here’s a full transcript.

JULIA BOORSTIN: WITH that will BIG NEWS TODAY ABOUT YOUR BIG INVESTMENT IN BAMTECH along with also also THESE TWO brand-new STREAMING SERVICES within the WORKS. WHY DID the item MAKE SENSE — YOU ALREADY OWNED A MINORITY STAKE IN BAMTECH — WHY DID the item MAKE SENSE TO BUY A MAJORITY STAKE?

BOB IGER: WELL that will REPRESENTS A BIG STRATEGIC SHIFT FOR THE COMPANY. along with also also WE FELT that will HAVING CONTROL OF THE PLATFORM – that will WE’VE BEEN VERY IMPRESSED WITH SINCE WE BOUGHT THE 33% SHARE A YEAR AGO – would likely GIVE US CONTROL OF OUR OWN DESTINIY, OR MORE ABILITY TO BASICALLY SHAPE THE SERVICES that will WE JUST DESCRIBED.

BOORSTIN: along with also also the item WAS TWO YEARS AGO ALMOST TO THE DAY that will YOU TALKED ABOUT THE RISE OF CORD-CUTTING along with also also HOW that will WAS STARTING TO truly IMPACT ESPN along with also also THE IMPACT YOU SAW GOING FORWARD. HOW MUCH can be ALL OF that will ABOUT THE RISE OF CORD-CUT along with also also YOU NEEDING TO MAKE BIG modifications TO CHANGE THE FUTURE OF ESPN?

IGER: WELL, that will MOVE CAPITALIZES ON A FEW TRENDS that will WE’VE SEEN. ON THE SPORTS SIDE, FIRST OF ALL, LIVE SPORTS CONTINUE TO BE VERY, VERY favorite. 94 OUT OF THE TOP 100 TV SHOWS IN 2016 within the UNITED STATES WERE SPORTING EVENTS, FOR INSTANCE.

SECONDLY, THE ESPN BRAND can be STILL VERY STRONG along with also also, THIRD, WE HAVE SEEN A FAIRLY SIGNIFICANT INCREASE IN APP-BASED MEDIA CONSUMPTION ON SERVICES that will ARE OVER THE TOP OR DIRECT TO CONSUMER SERVICES. SO WE FELT that will the item WAS TIME FOR US TO TAKE A BIGGER STEP IN that will DIRECTION TO OFFER ESPN-BRANDED LIVE SPORTS ON A SERVICE that will WE CONTROL, that will CAN BE BOUGHT OVER THE TOP along with also also SOLD DIRECT TO CONSUMER ON A PLATFORM, THE BAMTECH PLATFORM, that will HAS truly IMPRESSED US IN TERMS OF ITS LIVE STREAMING CAPABILITY, ITS ABILITY TO MANAGE CUSTOMER SERVICES ON BASICALLY A SOUP-TO-NUTS BASIS, MEANING via REGISTRATION along with also also CUSTOMER ACQUISITION TO CUSTOMER ATTENTION along with also also CREDIT CARD MANAGEMENT. along with also also THEY ALSO HAVE A VERY STRONG AD TECH SERVICE along with also also AN ABILITY TO MINE USER DATA, SO that will can be A VERY ROBUST PLATFORM, PERFECT FOR WHAT WE WANT TO DO WITH the item FOR ESPN.

BOORSTIN: SO TELL US ABOUT WHAT THE ESPN SERVICES can be GOING TO LOOK LIKE YOU SAY the item’S LAUNCHING within the FIRST HALF OF NEXT YEAR. HOW MUCH ARE YOU GOING TO CHARGE FOR the item, along with also also WHAT CAN YOU ACCESS IF the item DOESN’T INCLUDE WHAT YOU CURRENTLY HAVE ON ESPN?

IGER: WELL FIRST OF ALL THERE WILL BE ONE APP. WE develop the CONSUMER IN MIND WHEN WE THINK ABOUT THE EXPERIENCE WE WANT TO DELIVER, SO THERE WILL BE ONE ESPN APP along with also also AN ESPN OR A SPORTS ENTHUSIAST CAN USE THE ESPN APP AS THEY HAVE BEEN USING the item TO ACCESS SCORES along with also also HIGHLIGHTS along with also also additional SPORTS INFORMATION. the item CAN ALSO BE USED TO YOU AUTHENTIC THEIR SUBSCRIPTION TO MULTI-CHANNEL PROVIDERS SO THEY CAN WATCH THE LINEAR ESPN NETWORKS ON the item. IF THEY would likely LIKE TO HAVE ACCESS TO SOME 10,000 ADDITIONAL LIVE SPORTING EVENTS JUST within the FIRST YEAR, THEN THEY CAN BUY THE SUBSCRIPTION SERVICE WHICH can be A COMPLEMENTARY OR AN ADDITIVE SERVICE TO THE ESPN CHANNELS THROUGH THE SAME APP, SO the item’S A ONE-STOP SHOPPING, ONE-STOP EXPERIENCE FOR THE CONSUMER. AGAIN, ALL ESPN-BRANDED.

BOORSTIN: along with also also WHO DO CAN YOU SAY that will brand-new SERVICE can be TARGETING. can be the item TARGETING CORD-CUTTERS?

IGER: the item’S TARGETING SPORTS ENTHUSIASTS along with also also FANS OF ESPN.

BOORSTIN: along with also also SO JUST TO GET A BETTER SENSE OF HOW that will WILL FIT IN WITH YOUR OVERALL STRATEGY – can be THERE HAD A WORLD IN WHICH YOU would likely BREAK YOUR REGULAR ESPN SERVICE OUT via THE BUNDLE along with also also OFFER DIRECT TO CONSUMER THROUGH that will?

IGER: WELL FOR at that will point THE product OF THE MULTI-CHANNEL ECOSYSTEM – ONE that will ESPN HAS OBVIOUSLY DISTRIBUTED SERVICES ON via THE BEGINNING, can be STILL VERY ROBUST IN TERMS OF ITS PROFITABILITY TO THE COMPANY along with also also TO ESPN. SO WE DON’T HAVE RIGHT at that will point A NEED TO NECESSARILY BREAK the item OUT via that will, although that will CERTAINLY GIVES US THE OPTIONALITY IF WE GET TO A POINT WHERE that will BUSINESS product can be NO LONGER SERVING THE NEEDS OR THE INTEREST OF THE COMPANY along with also also THE SHAREHOLDERS along with also also ESPN. that will GIVES US THE ABILITY TO GO DIRECT WITH WHAT can be THE ESPN LINEAR SERVICE, although that will can be NOT AN ANNOUNCEMENT IN that will DIRECTION RIGHT at that will point. THE TECHNOLOGY PLATFORM along with also also THE USER INTERFACE that will WE; RE BUYING along with also also that will WELL CONTINUE TO MANAGE CERTAINLY GIVES US that will ABILITY THOUGH.

BOORSTIN: although YOU DID SEE WHAT WAS the item, AS 23% DECLINE OPERATING INCOME IN YOUR CABLE NETWORK, WHICH WAS DRIVEN — DRAGGED DOWN truly BY WHATS GOING ON AT ESPN.

IGER: the item’S ABERRATIONAL that will QUARTER. LET’S BE CAREFUL. WE’VE SAID ALL ALONG WHEN A brand-new CONTRACT WITH THE NBA KICKED IN, WHICH can be at that will point, that will the item would likely HAVE AN APPRECIABLE EFFECT NOT JUST ON OUR QUARTER although ON THE 2017 RESULTS. WE ACTUALLY HAD AN INCREASE IN SUBSCRIPTION REVENUE within the QUARTER via OUR MEDIA NETWORKS that will WAS SLIGHTLY OFFSET BY LOSSES IN SUBS – WE’VE SEEN A CONTINUING DECLINE IN SUBS AMONG OUR DISTRIBUTED NETWORKS, YES.

BOORSTIN: along with also also SO WHAT ARE YOU SEEING IN TERMS OF OVERALL CORD-CUTTING within the TRADITIONAL TV BUSINESSES VERSUS WHAT YOU’RE SEEING IN GAINS via THE SKINNY BUNDLES? OR THE brand-new DIGITAL STREAMING BUNDLES?

IGER: YOU KNOW WE’RE NOT BREAKING the item DOWN IN TERMS OF SPECIFICS. WE’VE SEEN GENERAL EROSION within the MULTI-CHANNEL ECOSYSTEM that will’S PROBABLY DUE TO A NUMBER FACTORS: PEOPLE NOT SIGNING UP UNTIL LATER IN LIFE. SOME CORD-CUTTING, SOME MIGRATION TO SKINNIER BUNDLES. the item’S A COMBINATION OF THINGS. the item’S STILL, BY THE WAY, EXTREMELY PROFITABLE PRODUCT FOR OUR COMPANY along with also also FOR numerous additional COMPANIES.

BOORSTIN: at that will point TELL US A LITTLE BIT MORE ABOUT THE DISNEY APP that will YOU’RE BUILDING FOR 2019. SOUND LIKE YOU’RE BUILDING A MINI NETFLIX.

IGER: WELL, WERE BUILDING DIRECT-TO-CONSUMER DISNEY SERVICE. WE’VE HAD A Great RELATIONSHIP WITH NETFLIX. THEY HAVE BEEN DISTRIBUTING within the PAY WINDOW DISNEY BRANDED MOVIES along with also also PIXAR-BRANDED MOVIES, MARVEL along with also also “STAR WARS.” WE HAD A DEAL that will GAVE US THE OPTION TO MOVE OUR FILMS via THE NETFLIX PLATFORM TO SOMEWHERE ELSE — STARTING having a CALENDAR YEAR 2019 SLATE along with also also that will’S WHAT WE’RE DOING.

SO WE’RE CREATING A DISNEY-BRANDED SERVICE that will WILL HAVE THOSE MOVIES ON the item, along with also also IF YOU LOOK AT THE 2019 SLATE, the item INCLUDES “FROZEN 2,” “TOY STORY 4” along with also also A LIVE ACTION REMAKE OF LION KING, AS A FOR INSTANCE, SO ITS AN INCREDIBLE SLATE. IN ADDITION WE HAVE A FILM LIBRARY PRODUCT along with also also WE HAVE TV LIBRARY PRODUCT along with also also WE’LL BE creating A SIGNIFICANT INVESTMENT IN ORIGINAL CONTENT, BOTH MOVIES along with also also TELEVISION SERIES, with that will PLATFORM EXCLUSIVELY. SO IF YOU’RE A FAMILY OR YOU’RE INTERESTED within the DISNEY BRAND, YOU WANT IF YOU WANT TO SUBSCRIBE TO AN EXTREMELY RICH, ROBUST, DISNEY-BRANDED SERVICE, YOU’LL BE ABLE DO the item. the item WILL USE THE BAMTECH PLATFORM TO BASICALLY DRIVE OR POWER THE PRODUCT.

BOORSTIN: HOW BIG DO YOU THINK THE POTENTIAL AUDIENCE with that will can be? DO YOU THINK that will can be ON THE SCALE OF A NETFLIX, along with also also WILL YOU BE OFFERING the item OVERSEAS along with also also HERE within the U.S.?

IGER: THE DISNEY BRAND’S NEVER BEEN STRONGER. WE DO A LOT OF RESEARCH ON that will. A LOT OF that will HAS TO DO WITH PRODUCT CYCLE, A LOT OF that will HAS TO DO WITH HOW WE’VE MANAGED THE BRAND OVER TIME. along with also also INTEREST IN DISNEY can be ONLY GROWING. that will’S GLOBAL, BY THE WAY, IN NATURE. that will can be A PRODUCT that will WILL ROLL OUT IN MULTIPLE MARKETS INTERNATIONALLY WITH SOME DEGREE OF VARIATION MARKET-BY-MARKET BASED ON A VARIETY OF DIFFERENT FACTORS. although ULTIMATELY, that will WILL BE A GLOBAL PRODUCT, although IN 2019 WE’LL LAUNCH within the UNITED STATES, A DISNEY-BRANDED SUBSCRIPTION SERVICE DIRECT TO CONSUMER.

BOORSTIN: along with also also WILL that will BE THE ENTIRE LIBRARY OF DISNEY MOVIES OR JUST THE MOVIES that will YOU’RE BRINGING OVER via NETFLIX?

IGER: the item WILL BE A COMBINATION. the item WILL BE THE PAY MOVIES – THE PAY WINDOW, to ensure MEANS the item GOES THEATRICAL WINDOW, that will USED TO BE CALLED THE HOME VIDEO WINDOW, WHICH can be at that will point DOMINATED BY DIGITAL SALES along with also also RENTAL. along with also also THEN POST that will, THE WINDOW that will NETFLIX HAS, THE DISNEY PIXAR MOVIES WILL BE ON that will PLATFORM. IN ADDITIONAL TO that will, WE’LL HAVE A SIGNIFICANT AMOUNT OF DISNEY LIBRARY PRODUCT via THE DISNEY STUDIOS OVER TIME along with also also TELEVISION LIBRARY PRODUCT, although WE’RE GOING TO MAKE A SIGNIFICANT INVESTMENT IN ORIGINAL DISNEY-BRANDED TELEVISION along with also also MOTION PICTURES FOR JUST that will PLATFORM.

BOORSTIN: NETFLIX can be SPENDING ABOUT $6 BILLION that will YEAR ON ORIGINAL CONTENT. HOW WILL YOUR SPENDING COMPARE TO that will?

IGER: LESS.

BOORSTIN: LESS.

IGER: WE’LL BE INVESTING LESS.

BOORSTIN: WHAT DOES that will MEAN WITH YOUR RELATIONSHIP WITH NETFLIX. YOU ARE creating MARVEL TV SHOWS –

IGER: WE HAVE A Great RELATIONSHIP WITH NETFLIX. YES – THEY LICENSE the item.

BOORSTIN: WILL YOU PULL THOSE MARVEL SHOWS?

IGER: NO. WE HAVE NO PLANS TO PULL that will. WE’VE HAD A GREAT RELATIONSHIP, THOSE ARE ORIGINAL SHOWS along with also also THE POSSIBILITY EXISTS that will WE’LL LICENSE additional THINGS TO THEM THEM DOWN THE ROAD. WE’RE IN DISCUSSIONS WITH THEM ON the item. although FOR at that will point, WHAT that will can be at that will point FOR US can be A DISNEY-BRANDED SERVICE, that will YOU CAN BUY OF ON ITS OWN, NOT PART OF AN UBER BRAND – BASICALLY, ITS A DISNEY BRAND – along with also also WE THINK that will THE TIME can be RIGHT TO DO that will GIVEN THE TRENDS that will WE’RE SEEING IN CONSUMPTION, THE VALUE OF THE DISNEY BRAND, THE PRODUCT CYCLE along with also also ALL THE additional OPPORTUNITIES that will BAMTECH PLATFORM at that will point GIVES US.

BOORSTIN: along with also also WILL that will PRICING BE COMPETITIVE WITH SAY, NETFLIX.

IGER: WE’RE – WE’VE GOT TIME TO DETERMINE WHAT THE PRICING WILL BE. along with also also WE’RE CERTAINLY NOT AT THE POINT WHERE WE’RE GOING TO ANNOUNCE that will.

BOORSTIN: DOES that will LAY THE GROUNDWORK TO LAUNCH A MARVEL SERVICE OR “STAR WARS” SERVICE DOWN THE LINE?

IGER: WE develop the TECHNICAL CAPABILITY TO DO that will. I GUESS YOU COULD SUGGEST BECAUSE OF that will the item LAYS GROUNDWORK. that will LAYS THE GROUNDWORK FOR THE COMPANY TO DO numerous THINGS. the item PROVIDES US WITH ALL SORTS OF OPTIONALITY that will WE HAVEN’T HAD BEFORE. YOU KNOW, the item’S ONE THING TO SAY YOU’LL BE within the BUSINESS OF DIRECT TO CONSUMER OR OVER THE TOP, along with also also ITS ONE THING TO DO the item. along with also also TO DO the item YOU NEED A truly STRONG TECHNOLOGY ENGINE…along with also also THE TALENT that will HAS THE EXPERIENCE TO MANAGE CUSTOMERS IN A COMPLETELY DIFFERENT WAY THEN WE’VE MANAGED CUSTOMERS IN OUR MEDIA BUSINESSES CERTAINLY within the PAST.

BOORSTIN: CERTAINLY, A FASCINATING brand-new DIRECTION FOR THE COMPANY. at that will point, I WANT TO MAKE SURE WE HIT ON THE THEME PARKS, WHICH SHOWED THE GREATEST GROWTH OF ANY OF YOUR DIVISIONS that will QUARTER. LOOKING AT THE RESULTS YOU’VE that will QUARTER along with also also THE BOOKINGS YOU’RE STARTING TO SEE FOR THE REST OF THE YEAR, WHATS YOUR ASSESSMENT OF THE HEALTH OF THE AMERICAN CONSUMER RIGHT at that will point?

IGER: BASED ON WE’VE SEEN that will AT OUR THEME PARKS, THE HEALTH OF THE AMERICAN CONSUMER can be VERY STRONG. along with also also A LOT HAS TO DO WITH THE INTEREST, I’VE SAID that will BEFORE, INTEREST within the PRODUCT that will WE’VE CREATED along with also also THE SERVICE that will WE DELIVER.

IF YOU LOOK AT DISNEY WORLD along with also also DISNEY WORLD, although IF YOU ALSO LOOK AT PARIS along with also also TOKYO, along with also also HONG KONG along with also also OF COURSE SHANGHAI, THESE ARE GREAT PRODUCTS along with also also GREAT EXPERIENCES that will TAP INTO ALL THE WONDERFUL IP that will WE’VE CREATED. BUILDING TWO STAR WARS LANDS can be A GREAT EXAMPLE. OF that will. although WHAT WE’VE DONE WITH THE “GUARDIAN OF THE GALAXY” along with also also THE LICENSING AGREEMENT that will WE HAD WITH JIM CAMERON along with also also FOR PANDORA IN FLORIDA. THESE ARE INCREDIBLE EXPERIENCES along with also also SO THE BUSINESSES that will WE RUN ARE QUITE HEALTHY. along with also also I TTHINK SUGGESTS that will THE AMERICAN CONSUMER along with also also CONSUMERS IN additional PARTS OF the globe ARE WILLING TO SPEND TO develop the EXPERIENCE that will WE DELIVER.

BOORSTIN: YOU DID REPORT HIGHER SPENDING AT numerous YOUR DIFFERENT PARKS. along with also also YOU’RE SPENDING RIGHT at that will point BILLIONS TO HAVE GREAT PARKS…. DO YOU ANTICIPATE, IF THERE can be AN ECONOMIC DOWNTURN, EITHER HERE OR CHINA, that will IMPACTING YOUR RESULTS?

IGER: THEY MIGHT IMPACT OUR RESULTS SHORT TERM, IF THERE WERE A DOWNTURN. although WE’VE NEVER LOOKED AT THE BUSINESS AS SHORT TERM. IN FACT, WHEN WE HAD THE BIG DOWNTURN IN 2008, 2009, WE WERE AT A PRETTY AGGRESSIVE INVESTMENT CYCLE that will PAID OFF WONDERFULLY FOR US IF YOU LOOK AT THE RESULTS, within the LAST DECADE ALMOST. SO WE’RE GOING TO CONTINUE TO INVEST within the BUSINESS FOR THE LONG TERM. along with also also WE BELIEVE that will’S THE ONLY WAY TO MANAGE BUSINESSES LIKE that will. IF YOU TRY TO MANAGE THE BUSINESSES YEAR BY YEAR OR QUARTER BY QUARTER THEN I THINK FRANKLY THEN YOU END YOU CREATING A SUBOPTIMAL EXPERIENCE FOR THE CONSUMER along with also also NOT truly BUILDING THE BUSINESS FOR THE LONG TERM.

BOORSTIN: ONE THING WE’VE TALKED ABOUT IN QUARTERS PAST can be THE NEED FOR CORPORATE TAX REFORM DISNEY PAYS A PARTICULARLY HIGH CORPORATE TAX RATE. DO YOU THINK WASHINGTON WILL BE ABLE TO GET CORPORATE TAX REFORM DONE?

IGER: I DON’T KNOW. I’M NOT GOING TO BET ON that will ONE. the item’S OBVIOUSLY VERY COMPLICATED LIKE ALL THINGS IN WASHINGTON THESE DAYS. along with also also SO I’M GOING TO LAY A BET DOWN ON WHETHER the item WILL HAPPEN OR WHEN the item would likely HAPPEN. WE CERTAINLY would likely LIKE FOR the item TO HAPPEN BECAUSE WE PAY AN UNUSUALLY HIGH CORPORATE TAX RATE. WE BELIEVE IF THERE WERE TAX LEGISLATION the item would likely BENEFIT CORPORATIONS. ONE, the item LEVELS THE PLAYING FIELD, INTERNATIONALLY. TWO, the item would likely GIVE US THE ABILITY …TO RETURN CAPITAL TO INVESTORS, MORE CAPITAL TO INVESTORS along with also also INVEST MORE IN OUR BUSINESSES. along with also also EVEN CREATE MORE JOBS WHICH WE’VE BEEN DOING within the UNITED STATES. MORE CAPITAL would likely GIVE US THE ABILITY TO EXPAND EVEN MORE.

BOORSTIN: although NO ODDS ON THE CHANCES OF the item HAPPENING.

IGER: UNLESS YOU’VE GOT THEM – I DON’T HAVE THEM.

BOORSTIN: I DON’T. at that will point, YOU DROPPED OUT OF THE PRESIDENT’S BUSINESS ADVISORY COUNCIL IN JUNE AFTER PRESIDENT TRUMP PULLED OUT OF THE PARIS CLIMATE ACCORD. HAVE YOU — YOU SAID ABOUT THREE MONTHS AGO that will YOU THOUGHT the item WAS IMPORTANT TO HAVE A SEAT within the ROOM WHEN that will HAPPENS. HAVE YOU BEEN IN TOUCH WITH THE PRESIDENT SINCE THEN?

IGER: I HAVE NOT, NO.

BOORSTIN: along with also also JUST A FINAL QUESTION SINCE THE brand-new STREAMING SERVICE can be OF SO MUCH INTEREST. DO YOU THINK that will additional COMPANIES WILL START DOING WHAT DISNEY HAS DONE IN CREATING THEIR OWN DIRECT-TO-CONSUMER SERVICES INSTEAD OF USING NETFLIX? can be that will A STREAMING OPTION?

IGER: I CAN’T COMMENT MUCH ABOUT THE additional COMPANIES. I KNOW THE INVESTMENT WE’RE creating can be SIGNIFICANT – NOT EVERYONE HAS, NOT ALL COMPANIES HAVE ACCESS TO that will KIND OF PRODUCT, the item’S VERY VITAL TO WHAT WE’RE DOING. along with also also NOT ALL COMPANIES HAVE BRANDS LIKE WE HAVE – WHETHER the item’S ESPN OR DISNEY OR PIXAR, SO I THINK that will OBVIOUSLY GIVES US QUITE A COMPETITIVE ADVANTAGE. along with also also SO I would likely SUGGEST I DON’T THINK YOU’LL SEE MUCH OF that will via additional COMPANIES although, YOU KNOW, I’M NOT RUNNING THOSE COMPANIES.

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