Disney CEO Bob Iger Is Bullish Over Disney+
One of the last major projects Bob Iger launched before he retired from Disney, was Disney+, and since his return to Disney late last year, there has been a big shift within the company to making a profit from its streaming services.
During a recent Morgan Stanley Technology, Media and Telecom Conference, Disney CEO Bob Iger took part in a Q&A session with Ben Swinburne from Morgan Stanley, and the opening question was about the future of Disney+, where he said:
Well, first of all, I’m generally bullish on streaming as a great consumer proposition, as a really robust platform to deliver high quality content under easily used circumstances. And I am extremely bullish on some of our streaming prospects, notably Disney+, which grew to just such an — at such a meteoric rate. And I think the reason it grew is the strength of the content, those brands that occupy that space. We know in terms of delivering profitability and growth to that platform, that we have to better rationalize our costs. Obviously, we have to attract more subs. But I think one of the key things that we have to figure out is a pricing strategy that makes sense.
I think, in our zeal to grow global subs, I think we were off in terms of that pricing strategy. And we’re now starting to learn more about it, and to adjust accordingly. And when you think about streaming in general, it’s a consumers delight in the sense that we used to talk often when it came to linear programming about à la carte, it’s the ultimate à la carte proposition for the consumer. And while I’m pro consumer, generally, I think we have to take a look at how easy it is for the consumer to not just sign on, but sign on sometimes under promotional circumstances where it’s not only less expensive, in some cases, it’s free, and the signing you get for three months, you get one month free, watch all you want in a month, so sign off that and go to another one that’s doing the same thing. So, I think we have a lot of rationalization to do from a pricing perspective. But, that’s one path to profitability, another is we do have to grow subs. A third is basically coming to grips with rising costs of production, and also figuring out just how much volume we need for that platform. The who — and then I don’t know whether you’re going to get specific about who but that’s a different set of circumstances.
Bob Iger also asked if he was optimistic about the future of the growth of Disney+, to which he replied:
Yes, I am optimistic. Obviously, as I mentioned, we grew at such a meteoric rate, we’re not going to see that kind of growth trajectory going forward. But in many of the markets outside of the United States that we’ve launched in, it’s still very, very new. And I think that there’s sub growth ahead, particularly as we get more consistent in terms of our content delivery. And one of the things that also happened, obviously COVID interrupted production. And so, the flow of production onto the platform has not been that even, it was very low to start. And it was interrupted by the pandemic. And we’re now just hitting our stride in that regard.
The other thing I didn’t mention in terms of path to profitability is advertising, which is also still very new on that platform. And when you think about a relatively reduced ad load, the purity of those brands and the specificity of that audience and an audience is not only very engaged, but loyal, it’s an advertiser’s delight. And that’s very new for us.
While there might be a big question mark over the future of Hulu, Bob Iger is one hundred percent behind Disney+ and is focused on making it a profitable business, which might mean we see more advertising, more price rises and a more curated slate of content, but the streaming service fits the core idea of the companies focus on brands and offering its consumers the best place for them.
Will Disney+ go through some more small changes in the future, no doubt they will, but Bob Iger couldn’t be more clear about how he feels about Disney+ moving forward.
Are you bullish on Disney+? Let us know on social media!