The Disney CEO covered a lot of ground during his Morgan Stanley conference.
In just over 30 minutes, Bob Iger covered a lot of ground during his Morgan Stanley conference appearance on Thursday. Among the topics offered: how he is working with the board to find his successor, how he likes Hulu and what lies ahead for the standalone ESPN.
Among the things he didn’t say was ‘Bob Chapek’ – Iger instead went with ‘my predecessor’ a few times – but he had plenty to say about why he felt compelled to return at Disney in November. Iger said he believes steps have been taken to stabilize the business and resolve the disconnect between revenue generation, expenses and marketing. He added that Disney “needs to tackle” runaway costs and its plan to cut 7,000 jobs and save $5 billion.
The next step is who is running Disney next.
“We all know that not only is it an important decision, but we don’t have an infinite amount of time to make it,” he said. “My goal is basically to leave two years from now with a trajectory, whether it’s my successor, or the company structure or the creative pipeline or the revenue generation that is very optimistic and positive.”
While discussing Hulu, Iger left the door open for an outright sale. On Thursday, he noted that Disney has a deal that could allow them to own “100%” of Hulu – an expensive proposition.
“It’s a solid platform, and it’s also a very attractive platform for advertisers,” he said. “It’s already proven valuable for them, and the publicity has proven valuable for us. But the environment is very, very tricky right now, and before we make any big decisions about our level of investment and our commitment to this business, we want to understand where it might go.
To that end, Iger said he asked a lieutenant to update him on what each big streamer had to say about their future prospects… and found that everyone was intent on being profitable. over the next two years and increase the number of subscribers by tens of millions. Good luck with that.
“That can’t happen,” he said. “There are six or seven aggressive, basically well-funded streaming companies all chasing the same subscribers, in many cases competing for the same content. Not everyone is going to win. »
That leaves ESPN. (Iger joked that Morgan Stanley was “salivating” about ESPN being reported separately in the future: Disney is divided into three parts for reporting purposes: Disney Entertainment, Disney Parks, Experiences and Products, and ESPN. ) He pointed out that in his new Disney, he remains optimistic about the ESPN brand even as he acknowledges that linear television is collapsing. Inevitably, he thinks, ESPN will become a direct-to-consumer streaming company as more sports migrate to digital – and another contender for subscribers.
“ESPN ratings have actually held up well, especially considering the erosion of the platform they’re on,” Iger said. “Then we have to look at what ESPN+ has done, which in 25 million subscribers is nothing to sneeze at. When you combine the strength of live sports and the value of branding and advertising, you can building a business that is not just dependent on subscribers, but dependent on advertising and revenue from subscribers I think there is reason for optimism.
At Iger’s Morgan Stanley conference, he also touched on the health of some of Disney’s other brands, namely Marvel and Star Wars. Read about those here.
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