Disney Sees Bigger Losses in Small Channels

(Bloomberg) -- Walt Disney Co.’s annual report shows that while all of its TV networks have lost subscribers, smaller outlets like the Lifetime Movie Network shrank faster than more-popular channels such as ESPN2.

Disney, like other TV companies, is addressing the loss of traditional TV subscribers by putting its channels in skinny bundles -- lower-priced packages such as Dish Network Corp.’s Sling TV. But to keep costs low, distributors leave channels out, which is why ESPN’s audience fell by 2.3 percent to 86 million in the past year, while ESPNU lost 4.5 percent to 64 million.

Subscribers to one of Sling’s basic $25-a-month packages includes ESPN and ESPN2, for example, but to get ESPNU, ESPN News and the SEC Network, customers have to pay an additional $5 a month.

The company said its subscriber losses are moderating. For Disney as a whole, they shrank by 2 percent for the year, according to the filing Wednesday, down from 3 percent the previous year. On a conference call with investors this month, Chief Financial Officer Christine McCarthy said the losses slowed to 1 percent in the fourth quarter. A&E, History, FYI and Lifetime Movie Network are jointly owned by Disney and Hearst Corp.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum

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