Disney CEO Says Netflix Unlikely to Corner Market
NEW YORK (TheStreet) -- Disney
While Netflix has achieved an impressive scale and is an important buyer of Disney content, Iger said at the Goldman Sachs Communacopia conference on Tuesday that he expects competitors to continue to emerge given diminishing technological barriers to entry in the industry.
"I think it is going to be really hard for them to corner the marketplace," said Iger of Netflix's standing as the leader in streaming video. "This is far from over," Iger added.
The Disney CEO, nevertheless, said Netflix plays an increasingly important role in the media industry given its rising status as a buyer of big ticket broadcast, cable and movie content. Just under a year ago, Netflix signed a content relationship with Disney in which the streaming service will have exclusive rights to Disney's movie releases.
Iger also expressed confidence in the bundled service offerings of cable giants and telecom carriers such as Comcast
Bundled providers also are likely to see benefits from offering triple-play bundles even if media content prices continue to increase and pressure their margins, Iger said. As programming costs rise, cable providers are likely to see offsets from growth areas such as broadband and wireless service.
"We don't see people cutting off their bundles just because they are watching hundreds and hundreds of hours on Netflix," Iger said. He did note that providers could see their profit margins pressured by rising content prices demanded from broadcast, cable and movie content providers such as Disney.
In terms of content, Iger expressed confidence in Disney's stable of assets and the benefits that the company is seeing from recent acquisitions such as Pixar, Marvel and Lucasfilms. As Disney improves on its share buybacks and dividends while investing in international growth, Iger said the company isn't currently planning another large-sized acquisition.
"We don't see any acquisitions the size of Marvel or Pixar or Lucas out there or that are imminent," Iger said.
Disney shares were rising 13 cents in early Tuesday trading to $64.88, within reach of record share price highs hit earlier in 2013.
-- Written by Antoine Gara in New York