Bob Iger Explains Why Disney Has To Transform For Streaming
Disney’s CEO Bob Iger recently spoke with Jack Hough from Barrons, about the future of the new streaming service, Disney+ and how its a huge priority for the company.
One of the big reasons Disney is taking it so seriously is how they view the world has changed and they need to keep up with it by changing with it. With the company shifting its attention to streaming.
Bob Iger pointed out that at one point, Kodak sold more film in their Disney parks than in any outside of the U.S., but failed to negotiate the shift to digital photography.
And he continued to talk about how he views moving the company to focus on streaming:
“This felt like our ability to endure was going to be solely tied to our ability to transform ourselves, and not pursue ‘we’re going to get through this; it’s a storm that’s passing overhead, and when it clears we’ll be fine.’ We have to be different when that storm clears. We can’t be the same.
Disney have been investing heavily in streaming, purchasing BAMTech Media and developing the technology they needed for launching services like ESPN+ and DisneyLife.
Which have resulted in losses for the company, but they are planning long term and see streaming as the future, but building the system would incur massive costs before any meaningful revenue was received.
Disney have a huge movie business and their TV division, which includes channels like ABC, Freeform and the Disney Channel, have been a steady flow of income for decades, but Netflix and streaming as a whole, was changing how customers consume content. With Bob Iger calling it a “Storm”, that they had to adapt to, rather than just keep going in the same direction.
During the interview, Bob Iger said that the company started having group discussions with senior executives in 2015 about streaming, with “everyone admitting this is real”.
Bob Iger continued to explain the issues with innovating with regards to funding innovating.
“What I’ve discovered is, businesses in a traditional space that want to innovate and spend money to do so, they park the cost of innovation in their traditional businesses. Those businesses all kind of suffer from the cost of that innovation, because it’s not typically monetized right away. You can get impatient to the point of losing interest and abandoning innovation, because you don’t have the patience to wait for it to really pay off.”
With ESPN+ now up and running with over a million subscribers, the company is now starting to see revenue come in from streaming, but it is expected that Disney+ won’t make a profit for 5 years.
Do you agree with Bob Iger?