Goldman Sachs Communacopia: Bullish Talk from AT&T and Disney
Goldman Sachs annual media and technology conference — Communacopia — kicked off today with optimism and bullish comments from AT&T's CEO Randall Stephenson and Disney CEO Bob Iger. The event is a who's who of media, tech and telecom CEOs; the economy is top of mind, as is digital distribution and the growing smart phone and tablet market.
Here's a look at today's big headlines:
AT&T's Stephenson kicked off the three days of CEO presentations, saying there are no signs that growth is abating. At the lower-end, he does see consumers "buying down," looking for deals, but the wireless and data business are recession resistant.
Mobile devices are front and center, and just today AT&T launched a satellite-enabled smart phone to give total coverage in every corner of the US.
Stephenson declared that the company's on pace to set a record for smartphones, aka 'integrated devices' in the third quarter.
The company has half a million iPad tablets connected to the network and is seeing improvements in its wired broadband but business.
Stephenson couldn't dodge questions about the looming loss of AT&T's exclusive iPhone deal. But he did play down its importance, saying that two thirds of iPhone owners were long-term AT&T users before they signed up for the iPhone service, saying they're unlikely to switch. He threw out the stat that 80 percent of the iPhone base is either in a family talk plan or in a business relationship with AT&T, saying that those customers are 'very sticky.' Stephenson emphasized the "extended array" of smartphones Apple subscribers can pick from, which reads as AT&T saying it's not too reliant on Apple.
Disney's Iger started off the conversation by saying that Disney feels "underappreciated" -- that Wall Street doesn't quite realize that its brands have never been stronger. Responding to a question about one of Disney's strongest businesses, ESPN, Iger says it is *not* for sale. He spoke about the success of the Disney strategy of creating brands to exploit across all its platforms -- selling 'Cars' or 'Fairies' merchandise actually ends up driving the success of related DVDs and video content.
Iger had plenty of positive comments about the TV business. The company isn't seeing any "cord-cutting" -- i.e. it's not losing any cable TV subscribers despite the wealth of digital options available. And perhaps most importantly, revenues from retransmission fees "are real," Iger pointing out that it isn't taking any investment to increase the subscription revenue coming from cable carriers.
He also emphasized throughout the interview that Disney is putting technology front and center -- saying that Disney feels more comfortable aligning with technology companies than fighting them. This comment refers to ABC's decision to stream shows for 99 cents per rental via iTunes. He pointed to the success of ESPN3.com as an example of Disney's push to enable digital access to content. And he even addressed the possibility for a Disney-branded digital subscription service, which would be real game changer in terms of the way the company sells content.
PROGRAM NOTE: IAC CEO Barry Diller also spoke this afternoon. I'll be interviewing him -- tune in to the 4 pm hour of Closing Bell for excerpts from our interview.
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