Disney’s Streaming Services Will Be on the Radar of Returning CEO Bob Iger

Disney will likely refocus on its content offerings under returning CEO Bob Iger.

Bob Iger speaks in front of a "Walt Disney Company" sign.
It’s a different world than when Bob Iger stepped down from CEO in 2020. Getty Images

Bob Iger, who led Disney for 15 years, is CEO again, replacing Bob Chapek who served less than two years in the role. The move foreshadows more major changes for the company.

Investors cheered the news, lifting Disney’s shares 9 percent today. Chapek entered the role in February 2020, and the relatively unknown executive led the company through the Covid-19 pandemic and difficult economic times, keeping the parks from permanent closure after months of being shut down. But in recent months, Disney has faced increased pressure from investors over its streaming business.

Disney’s combined streaming services—Disney+, ESPN+ and Hulu—may match rival Netflix in their number of subscribers but don’t turn a profit. Disney lost $4 billion from these services in the year ended Oct. 1, more than twice its losses of last year. The company’s share price has hit a five-year low, excluding a brief pandemic-related dip in March 2020.

One of Iger’s first moves will likely be creating a plan for Disney’s streaming services, which incudes what the future of their content will look like, Wells Fargo analysts said in a research report today. Disney’s three streaming services broadcast sports (on ESPN+), general entertainment (on Hulu) and shows and movies using its own intellectual property (on Disney+), and investors are concerned Disney is over-extending itself. Iger’s term will likely address this, the analysts said.

“(Wall) Street will see him as a steady leader in uncertain times,” the Wells Fargo analysts said. “Equally important is that Iger is considered popular among the creative ranks within (Disney) and Hollywood — an area where Chapek was not embraced.” Chapek was instead an expert in park and resort operations, which he ran prior to being CEO.

Even if content is the future of the company, investors are looking for Disney to clean up its offerings. De-emphasizing general entertainment, the specialty of Hulu, might regain shareholder trust, Guggenheim analysts said in a research report. This could include selling off Hulu.

Iger might also reorganize the company and reevaluate its long-term subscriber targets, the analysts said.

Disney’s Streaming Services Will Be on the Radar of Returning CEO Bob Iger