Media Money with Julia Boorstin

Disney's Bob Iger on Digital, Monetization, and the Consumer

While Technology is the topic of the Fortune Brainstorm TECH conference in Pasadena, Ca, where I'm reporting from today, media companies are front and center here.

The shift of viewers to the web and piracy, among other things - is media's biggest challenge and also the potential solution to its problems.

I sat down with Disney CEO Bob Iger to hear his strategy for navigating the digital future.

Iger is optimistic about the business opportunity technology offers.

(He points out most leaders are optimistic, who wants to follow a pessimist?)

But Iger's optimism is based on the real conviction that consumers will pay for content online. Iger outlined how much consumers pay, per hour, for different types of entertainment. Consumers happily pay five bucks an hour for movies, about 50 cents an hour to watch cable or Satellite TV. And users of Club Penguin, Disney's social network, pay a subscription fee. So, Iger reasons, consumers will pay for a good interface and valuable content, which with brands like ESPN and Disney Channel, the mouse house certainly has. Iger says the company is looking at all sorts of different revenue models, including advertising (of course), micropayments, and even a Disney content subscription service.

Iger is notably cautious about this much- buzzed about idea of "TV Everywhere," a joint venture from Time Warner and Comcast to distribute cable content to subscribers online.

The idea is that if you allow cable subscribers to access that TV content from the web, on demand, it'll be an extra incentive for them to keep paying their cable bill, instead dumping the service in favor of watching TV online.

But from Iger's perspective, consumers are happy with the cable model; they're not cancelling cable subscriptions (ESPN is without a doubt one of the most valuable cable properties out there). So Iger figures, why give the content away for free? He wants to charge for it...

On a totally different note, I asked Iger for his perspective on the California budget crisis, Disney is, after all, the only media conglomerate based in the state. Will the fiscal issues, the potentially instable infrastructure and the high taxes push Disney to look to greener pastures? Iger says no, that they like being close to Disneyland and like to have Hollywood in their backyard. He said that they view themselves as more of "a partner" with the state in this recovery.

The Golden State can certainly use a helping hand from Mickey Mouse.

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