Disney (DIS) CEO Bob Iger has his sights set on streaming supremacy, even as the company reported some disappointing numbers on its Q3 earnings call yesterday afternoon (August 9). During the call, Iger extolled the performance of Disney’s parks and resorts, emphasized the importance of the studio’s tentpole franchises and expressed optimism about Disney’s overall streaming strategy.
It was a change of tune for Iger, who made headlines earlier this summer with his comments at Sun Valley, which characterized the ongoing strikes in Hollywood as “disturbing.” Yesterday, Iger attempted to make amends by stating that “nothing is more important to this company than its relationships with the creative community” and went so far as to say that he is “personally committed” to finding a resolution.
Iger also commented on some of Disney’s recent “disappointing” releases, including Indiana Jones and the Dial of Destiny and Elemental, noting that an ongoing focus at the studio will be “improving the quality of [Disney’s] titles” while also cutting the number of titles the company releases. But he maintained that Disney will focus on its franchises and tentpoles, contradicting his assertion at Sun Valley that Marvel properties have “diluted focus and attention.”
Iger made the most of disappointing numbers
The call seemed to serve as reassurance that Disney was on track in spite of the company’s lower-than-expected numbers. Revenue was reported at $22.33 billion, when experts predicted it would be between $22.4 and $22.5 billion. The number of global Disney+ subscribers has also continued to drop, from 161.8 million in Q1 to 157.8 million in Q2 to 146.1 million now. The aftermath of the earnings report left the market uncertain, with Disney’s stock dropping 1.41% to $86.29 after market close only to rebound to over $90 following Iger’s fireside chat.
Iger and co. also expanded on a few recent announcements, many of which had to do with ESPN’s changing role at Disney. The sports entity has been a point of contention lately, pulling less weight for the media empire than it has in the past. Iger continues to be committed to turning the linear sports channel into a direct-to-consumer one, thinking of streaming as sports’ final frontier.
He made it clear that Disney will maintain ownership of ESPN rather than sell it—but he is looking for strategic partners as the property continues to change. One of those partners is PENN Entertainment, which is involved in Disney’s move into the world of sports gambling: ESPN Bet. Iger sees ESPN Bet as a valuable way to “enhance consumer engagement” in the brand as a whole, specifying “young consumers” as a targeted audience.
The topic of increased streaming subscription prices dominated much of the conversation, and Iger seemed excited about the myriad bundling options available between Disney+, Hulu and ESPN+. The company is hiking up prices for Disney+ Premium to $13.99/month and ad-free Hulu to $17.99/month starting October 12. Iger pointed to these increases to emphasize the importance of ad revenue on streaming, as prices for ad-supported subscriptions for Disney+ and Hulu will both remain at $7.99/month (a bundled subscription of the two will also be staying at a flat rate, $9.99/month). The CEO made it clear that ads on streaming is what he views as the most viable path to profitability, and it’s a strategy he will be pushing in the future.