Michael Morris : Thank you. Good afternoon. One follow-up on the sports JV first, and that’s how did you comfortable that the availability of the service won’t drive accelerated cord-cutting and become an economic drag on your business and the business more broadly? And how do you expect this to impact your renewal discussions with your distribution partners? That’s my first. And then my second, Bob, you’ve seen several iterations of the video game strategy during your tenure. Can you talk a little bit more about why this investment in Epic Games is the right move for you here and what a product might look like and when that may come to market? Thank you.
Bob Iger : Sure. Let me take the second part of the question first. Yes, you’re right. We’ve tried our hand at video games in a number of different directions. And actually, the one that ended up being the most successful for us was the license. And in fact, we’ve licensed, I think, $9 billion franchises, including the Spider-Man franchise, which is the most successful video game last year. After I came back, I sat down with Josh D’Amaro, who runs our experiences business and his executive who actually manages games, Sean Shoptaw. And one of the things they showed me — actually, the first thing they showed me were demographic trends. And when I saw Gen Z and Gen Alpha and even millennials and I saw the amount of time they were spending in terms of their total media screen time on video games, it was stunning to me, equal to what they spend on TV and movies.
And the conclusion I reached was we have to be there, and we have to be there as soon as we possibly can in a very compelling way. We knew through our relationship with Fortnite that there was already success when some of our characters and franchises were expressed or showed up in Fortnite. And we knew Tim Sweeney at Epic because we were involved — he was involved in our Accelerator program, I think in 2017. And so, I met with Tim, and Josh and his team started a discussion about what if we create a gigantic Disney World a la Fortnite that could live next to Fortnite and be completely interconnected with it, a world where people could play games that we create, could create their own games, could watch. You can imagine the creation of short-form videos or may — we may even use the platform to actually distribute some of our content, also the people that could interact with one another, and ultimately, some form of shopping as well and other forms of creation.
Obviously, there’ll be some — there are the opportunities to buy digital goods, but maybe even at some point, physical goods. And I just think that given the demographic trends and given the success of Fortnite — and by the way, they’re experiencing really a great era of both customer satisfaction and growth as they return to some of their roots. The numbers at Fortnite have been really compelling. And we just think this is — just as we take our IP from our movies and our television and have them expressed in our parks, this is a great way to do it in games. And for us, it’s a way to have skin in the game with them with the investment of $1.5 billion, strengthen a partnership because we have skin in the game, but also build a world where we’re actually not creating too much risk for the company.
So as we see it, this is the best of all worlds in many respects from a business venture perspective and certainly great for consumers who love to interact with our characters already in video game format. So I’m actually really thrilled about it. And the second — or the first part of your first question, accelerating cord-cutting. Understand that we’re going to get paid in this new joint venture for our channels at a level that’s commensurate with the level that we get paid for those channels in the multi-channel ecosystem. And so if a consumer moves out of that and then into this, then what we get paid for our — certainly, these channels that are in it is equal to where we get paid there. We have some other channels that are not part of this new bundle.
But frankly, if you look at our company and you look at what we’ve done with FX on Hulu, with the Disney Channel on Disney+, with National Geographic on Disney+, we’re really very well positioned to withstand, basically, the continued challenges that the multi-channel ecosystem will have. And while there might be some de minimis economic impact on us with more cord-cutting for those channels, we’re backstopped in all of those channels with the content that exists or that we ultimately put on Hulu and Disney+. So it’s — for us, it’s very low risk and actually, as I talked earlier, potentially quite accretive to us in terms of signing up sports fans that have never signed up for the bundle where they may no longer want it.
Alexia Quadrani : Okay. Thanks for the question. And I want to thank everyone for joining us today. Note that a reconciliation of non-GAAP measures that were referred to on this call to the equivalent GAAP measures can be found on our Investor Relations website. Let me also remind you that certain statements on this call, including financial estimates or statements about our plans, guidance or expectations and drivers, including future revenues, profitability, subscribers free cash flow, adjusted EPS and capital allocation and other statements that are not historical in nature, may constitute forward-looking statements under the securities laws. We make these statements on the basis of our views and assumptions regarding future events and business performance at the time we make them, and we do not undertake any obligation to update these statements.
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