Disney’s CEO covered a lot of Morgan Stanley’s conference.
In just over 30 minutes, Bob Iger covered a lot at the Morgan Stanley conference on Thursday. Topics covered include how he’s working with the board to find a successor, how he evaluates Hulu and what’s next for stand-alone ESPN.
Among the things he didn’t say was “Bob Chapek” — Iger instead went by “my predecessor” a couple of times — but he had plenty to say about why he felt the need to return to Disney in November. Iger said he feels steps have been taken to stabilize the company and untangle revenue, spending and marketing. He added that Disney had to “come to grips” with costs spiraling out of control and its plan to cut 7,000 jobs and save $5 billion.
Next is who controls Disney.
“We all know this is not only an important decision, but we don’t have infinite time to make it,” he said. “Essentially, my goal is to leave here in two years with a trajectory, whether it’s about my successor, whether it’s the structure of the company, whether it’s the creative process, or revenue generation, that is very optimistic and positive.”
Speaking of Hulu, Iger left the door open for an outright sale. On Thursday, he noted that Disney has a deal that would allow them to own “100 percent” of Hulu — an expensive proposition.
“It’s a solid platform and a very attractive platform for advertisers,” he said. “It’s already proven valuable to them, and advertising has proven valuable to us. But the environment is very, very challenging right now, and before we make any big decisions about our level of investment and our commitment to the business, we want to understand where that might lead.”
To that end, Iger said he asked a lieutenant to fill him in on what every major streamer had said about their future prospects … and found that everyone wants to be profitable in the next few years and add tens of millions of subscribers. Good luck with that.
“This can’t be happening,” he said. “There are basically six or seven well-funded, aggressive streaming businesses all looking for the same subscribers and in many cases competing for the same content. Not everyone is going to win.”
That’s how ESPN stays. (Iger joked that Morgan Stanley is “drooling” about ESPN being reported separately in the future: Disney will be split into three divisions for reporting purposes: Disney Entertainment, Disney Parks, Experiences and Products, and ESPN.) He emphasized that new Disney remains optimistic about the ESPN brand, even as it acknowledges that linear television is collapsing. Inevitably, he believes, ESPN will become a direct-to-consumer streaming business as more sports move to digital — and another competitor for subscribers.
“The ESPN ratings have been really good, especially considering the erosion of the platform they’re on,” Iger said. “Then we have to look at what ESPN+ has done, which at 25 million subscribers is nothing to sneeze at. By combining the power of live sports with brand and advertising value, you can create a business that is not only subscriber-dependent, but also dependent on advertising and subscriber revenue. I think there is reason to be bullish.”
At the Morgan Stanley conference, Iger also addressed the health of some of Disney’s other brands, namely Marvel and Star Wars. Read about them here.
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