Walt Disney’s Chief Executive Bob Iger said on Wednesday that it has significantly reduced its investment in content for traditional television networks. This is part of its plan to maximize viewers and profit in the age of streaming television. When Iger returned to Disney as CEO in November 2022 after leaving retirement, he stated he took a broad look at traditional media.
He concluded that conventional networks like ABC continue to be valuable marketing tools for connecting with older audiences who aren’t following Disney streaming titles like “Abbott Elementary.”
Disney Shifts TV Investment to Streaming
However, Iger mentioned at Moffett Nathanson’s 2024 Media, Internet, and Communications Conference in New York that the business has quite dramatically lowered its investment in content specifically aimed at those traditional networks. “We feel comfortable with our hand right now because we are using those networks efficiently and effectively,” he stated.
According to Iger, shows like “Abbott” and “Grey’s Anatomy” migrate fast to Disney’s Hulu streaming platform, where they draw a younger audience. The CEO continued, “Disney is able to amortize costs across platforms thanks to this strategy.”
One executive, Dana Walden, is the sole person in charge of both streaming and traditional entertainment networks. “We’re basically aggregating a greater audience, amortizing costs, and using the marketing of the traditional network, really, to help in some cases,” Iger stated.
“We’re doing that across the board, Disney Channel, ABC, National Geographic, and it’s working,” he stated. Disney’s theme park division should continue to develop, Iger stated, though maybe not as quickly as in previous years.
Disney CEO Says Theme Park Growth to Slow Down
Disney’s theme park division should continue to develop, Iger stated, though maybe not as quickly as in previous years. “We’ve had double-digit revenue growth in that business for quite some time, and that’s extraordinary,” he stated. “But I think we’re being realistic, too, in that delivering double-digit revenue growth … well into the future is not necessarily that achievable.” Disney’s stock dropped 2.5% on Wednesday, closing at $102.77 on the New York Stock Exchange.
Disney Targets Higher Engagement and Lower Churn with Streaming Plans
Disney’s main goal with streaming in the near future is to increase engagement to lower churn. To achieve this, Disney+ has linked Hulu for users of both services, and in December, Disney+ will launch an ESPN tile that will provide non-subscribers with a “taste” of live programs and games (ESPN+ users will have access to all of Disney+’s content). Additionally, Iger announced that Disney will be taking stronger measures against sharing passwords without authorization. The measures will begin in select countries in June and will be implemented “more aggressively across the globe” in September.
Disney also intends to boost user engagement by utilizing artificial intelligence technologies to provide people with more personalized content experiences. Disney’s streaming services need to offer “that first great experience,” according to Iger. “Every time they open the app, it needs to be something new—AI will be a really, really important tool to help with all of this.” According to Iger, a personalized version of ESPN’s well-known news and highlights program “Sports Center” will be available soon. This version would provide content tailored to users’ preferred sports or teams. “Sports Center” on ESPN should recognize that I’m a Knicks fan when you turn it on,” Iger stated. That is what Disney is working on.
Iger and Disney Board Re-elected Despite Proxy Battle
At last month’s annual shareholders meeting, Iger and the four current Disney-backed board members were elected again with an impressive majority, following a bitter, multi-month proxy battle spearheaded by activist investor Nelson Peltz. Peltz’s Trian Partners failed to secure two board seats, claiming that Disney needed members with new perspectives due to the company’s dismal stock performance.
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