In a recent article
Fortune published, Cyrus Sanati details how the issues
Disney has been facing with
ABC is leading to a partnership with Spanish-language television network
Univision and a possible creation of yet another 24-hour cable news network. Several reasons which have initiated this response are as follows:
- ABC's declining growth rate and earnings have continuously been holding back Disney's stock.
- While the rest of the Disney conglomerate met or exceeded revenue and profit expectations, Disney's broadcast division, including the ABC network and its 8 ABC-owned affiliates, reported a 7% decline in revenue and 23% decline in operating income for its fiscal first quarter in comparison to last year's.
- The end of Oprah Winfrey's talk show and the decrease in political ads may have lowered revenue from ABC more than they should have.
- ABC's decreasing audience (1% decrease from previous year) is falling behind those of Fox (2% increase) and CBS (14% increase) and is consequently lowering the worth of its ad space.
- Americans are getting their news from other mediums, such as the internet, and ABC News has been resulting to cheap entertainment news to attract viewers.
In light of these continuous issues, Disney still continues to hold onto ABC. Although Disney reportedly contemplated selling ABC to a group of private equity firms in the spring of 2010, the deal never occurred and instead the company has focused on cutting costs and employees at ABC. Disney is now considering backing up ABC by creating a partnership with Univision, a Spanish-language powerhouse, to create a cable news network in English catering to the Hispanic market. I am curious as to how this will turn out. While other 24-hour cable news networks are catered towards and divided across different ideologies, with News Corp's Fox News for conservatives, Time Warner's CNN for moderates and Comcast and Microsoft's MSNBC for liberals, the attempt to create a news network appealing towards a specific ethnic group, English-speaking Hispanic-Americans, seems too focused. However, ABC believes that the ever-growing English-speaking Hispanic population will be interested in this news network and are hoping to use the network to directly connect advertisers to this particular audience. While I believe this new news network could be able to work, Disney and Univision should focus on marketing this network to obtain a loyal audience base, especially since it is becoming increasingly more common for people to receive their news from various internet sources. Otherwise, Disney should contemplate cutting its ties with ABC to maintain and strengthen their status as America's largest media conglomerate. What do you think?
In light of these continuous issues, Disney still continues to hold onto ABC. Although Disney reportedly contemplated selling ABC to a group of private equity firms in the spring of 2010, the deal never occurred and instead the company has focused on cutting costs and employees at ABC. Disney is now considering backing up ABC by creating a partnership with Univision, a Spanish-language powerhouse, to create a cable news network in English catering to the Hispanic market. I am curious as to how this will turn out. While other 24-hour cable news networks are catered towards and divided across different ideologies, with News Corp's Fox News for conservatives, Time Warner's CNN for moderates and Comcast and Microsoft's MSNBC for liberals, the attempt to create a news network appealing towards a specific ethnic group, English-speaking Hispanic-Americans, seems too focused. However, ABC believes that the ever-growing English-speaking Hispanic population will be interested in this news network and are hoping to use the network to directly connect advertisers to this particular audience. While I believe this new news network could be able to work, Disney and Univision should focus on marketing this network to obtain a loyal audience base, especially since it is becoming increasingly more common for people to receive their news from various internet sources. Otherwise, Disney should contemplate cutting its ties with ABC to maintain and strengthen their status as America's largest media conglomerate. What do you think?
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