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Our Media Networks include an extraordinarily diverse range of broadcast,
cable and radio assets. The best known, of course, is the ABC Television
Network. Like the proverbial battleship that can’t turn on
a dime, the network is slowly but surely dealing with its financial
and ratings performance issues. In 2003, we stabilized its primetime
ratings and established a solid foundation for future growth, while
at the same time significantly reducing the network’s cost
structure. The combination of improved ratings and reduced costs
could have important implications for the entire company’s
bottom line. The year was also noteworthy for ABC News’ extraordinary,
comprehensive and heroic coverage of developments in Iraq, as journalists
and their support teams put themselves in harm’s way so that
we could be informed as America went to war. This fall, we broadcast
10 primetime comedies, more than any other network. All of them
did well enough to merit renewals for the entire season. Our strategic
emphasis on comedy is driven by the fact that successful comedies
endure over time and can pay dividends for years, since they are
particularly well-suited for the off-network syndication market.
ABC aired and Touchstone Television produced successful shows like
My Wife and Kids, According to Jim and several of our newer
comedies. Furthermore, this strategy plays to ABC’s historic
strengths, since the network was known for its strong comedy line-up
throughout its years as the number one network. And speaking of
ABC’s roots, earlier this year, The Wonderful World of
Disney, which began on ABC in 1954 with the name Disneyland,
was inducted into the National Association of Broadcasting’s
Hall of Fame. I was able to accept the honor on behalf of the company,
and it was a nice reminder that the intermingling of Disney and
ABC goes back far beyond the 1996 acquisition.
Our collection of cable assets is unmatched, starting, of course,
with ESPN, which is another of our phenomenal brands and will be
celebrating its 25th anniversary on September 7. ESPN continues
to be a strong growth story. The network’s overall ratings
were up 13 percent in 2003 and ESPN and ESPN2 had their highest
viewership ever in October, up an incredible 39 percent for ESPN
in primetime over October 2002, making it number one among all basic
cable networks during the month. In an era when other networks are
losing young male audiences, ESPN is embraced by this key demographic.
During the year, ESPN, ESPN2 and ABC Sports together delivered more
than 50 percent of total gross ratings points for nationally televised
sports programming. Independent surveys of cable operators cite
ESPN as number one in importance to cable systems in terms of driving
subscriptions, retention and local ad revenue. In a survey of subscribers
released toward the end of the year, ESPN was selected the favorite
network among cable viewers. And the ESPN growth story continues.
In January, we launch ESPN Deportes for the Spanish-speaking audience,
and earlier in 2003 inaugurated ESPN HD for people who like their
sports in pristine High Definition Television. So far, not many
people have such TVs. Now that ESPN is offering HD telecasts, industry
analysts predict it will accelerate the adoption of High Definition
sets, in much the same way that The Wonderful World of Color
(which was the name of The Wonderful World of Disney back
in the ‘60s) motivated more people to buy color TVs, which
resulted in prices coming down, and more people owning color TVs.
Another ESPN technological advancement, developed by ESPN.com in
association with our Walt Disney Internet Group, is ESPN Motion,
which allows people who log on to ESPN.com to view TV-quality clips
without waiting for the normal download time. ESPN Motion isn’t
just great for viewers, but for advertisers as well, since they
can finally embed TV-style ads into Internet entertainment. ESPN
is also developing an appealing line of consumer products for its
fans in addition to publishing the successful and growing ESPN
The Magazine.
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