Robert Iger: Michael, on the first part, I’m not going to comment on the future structure of the company or the asset makeup of the company. As I’ve said, we’re looking at strategic options both for ESPN and for the Linear Networks, obviously, addressing all the challenges that those businesses are facing. I’m looking forward to reading your thesis on it. Maybe you’ll give us some ideas about it, but I’m not going to make any comments about it right now. Regarding the second question and ESPN, the strategic partnerships that we’re looking to create and that we’re actually in discussions about are aimed at accomplishing a few things: one, content, meaning increasing the content that ESPN offers; and two, possibly, I’ll call it distribution and marketing support.
And it’s possible that we’ll be able to do both as — and this is all being done with an eye toward the inevitability of taking the SPN flagship over the top. So when we look ahead and we see a business that will be a direct — primarily a direct-to-consumer business, we obviously have an eye toward how much content do we need in order to make that a successful business. That obviously ties to what the pricing model need to be and actually, how much distribution support we need. We benefited greatly from the distribution support in the old business model from cable and satellite. Obviously, when you go DTC, you’re kind of doing it on your own or maybe not or maybe there’s an opportunity with another entity to help in that regard. So we’re basically looking quite expansively.
I must say we’re extremely encouraged with all the interest that we’ve had already in this regard. And I think it’s safe to assume, as we ultimately turn this into a streaming business, while we have a phenomenal hand right now better than anyone else in terms of the content that ESPN offers that — we believe that adding more content in under economical circumstances might be a wise thing.
Michael Nathanson: Okay. Thanks, Bob.
Alexia Quadrani: Operator, next question please.
Operator: Our next question comes from Steven Cahall from Wells Fargo. Please go ahead with your question.
Steven Cahall: Thank you. Bob, you said you’re now on track to exceed that initial goal of $5.5 billion in cost savings, and DTC came in ahead in the quarter. As you think about the future of this business long term and getting to kind of the price and cost structure that you’re aiming for, do you have any expectations for longer-term DTC margins? It just seems like you’re meaningfully below where Netflix was at a similar revenue scale. So I’m wondering how you think about that 15% or 20% margin level as that business gets above $20 billion in revenue this year. And then just secondly, as a follow-up, given that you have the Hulu put coming up next year, what are your thoughts on your ability to fund that transaction as we head into that time horizon? Thank you.
Robert Iger: Our streaming business is still actually very young. In fact, it’s not even four years old. It launched in November of 2019. And we love to have the margins that Netflix has. They’ve accomplished those margins though, over a substantially longer period of time and they’ve done so because they figured out how to really carefully balance their investment in programming with their pricing strategy and what they spend in marketing. Because we’re new at all of this, we actually have not really achieved the kind of balance we know we need to achieve in terms of cost savings and pricing and money spent on marketing. And of course, all the other things that we’re looking at from a technological perspective that grows engagement with our customers, for instance, recommendation engines would be one example of that, that have the ability to improve performance or obviously grow consumption.
