Disney CEO Bob Iger announced that cost-cutting is coming to the entertainment giant, from theme parks to film and TV to streaming services, with an emphasis on quality, not volume.
Iger, who retook the helm from Bob Chapek after the former CEO’s disastrous run that prioritized woke over profit, discussed the changes and admitted theme park price hikes have been too “aggressive.”
“I always believed that Disney was a brand that needs to be accessible. And I think that in our zeal to grow profits, we may have been a little bit too aggressive about some of our pricing,” he said while speaking at a Morgan Stanley investor’s conference on Thursday, Daily Mail reported.
“And I think there is a way to continue to grow our business but be smarter about how we price so that we maintain that brand value of accessibility,” he added.
The CEO, who previously held the position before stepping down in 2021, promised “to continue to listen to consumers [and] we’re going to continue to adjust,” admitting that the changes hurt Disney’s loyal fanbase.
“On Thursday he said his focus was going to be on cost cutting measures at Disney to make it more affordable for customers, and announced a plan to reorganize the company and find $ 5 billion in savings. Part of that plan is to cut 7,000 jobs,” the Daily Mail reported.
“I think there’s a way to continue to grow that business, but be smarter about how we price so that we maintain that brand value of accessibility,” he said.
Iger said Disney is also closely examining all aspects of its content business and will look closely at how much it is spending on content and how many projects it produces going forward, The Hollywood Reporter reported.
“I’m really pleased that the support that I’m getting from the content creators of the company is significant and real, and it comes in the form of reducing the expense per content, whether it’s a TV series or a film, where costs have just skyrocketed in a huge way and not a supportable way in my opinion. They all agree to that,” Iger said, according to THR.
The executive added that it was also about “understanding how much volume we need, reducing how much we make. So it’s how much we spend on what we make and how much we make.” But he left open the possibility of selling content to third parties.
“And as we look to reduce the content that we’re creating for our own platforms, there probably are opportunities to license to third parties,” Iger said. “For a while, that was verboten or something we couldn’t possibly do, because we were so favoring our own streaming platforms. But if we get to a point where we need less content for those platforms, and we still have the capability of producing that content, why not use it to grow revenue? And that’s what we would likely do.”
It remains to be seen what Disney will do with Hulu — the company holds a two-thirds stake, while Comcast owns a third — Comcast CEO Brian Roberts has expressed interest in owning Hulu outright.
“What we’re doing right now, because we own two-thirds of Hulu, and we have an agreement with Comcast that may result in us owning 100 percent, is we’re really studying the business very, very carefully, all those competitive dynamics with an understanding that we have a good platform in Hulu,” Iger said.
Insisting that Disney “is very strong, the most powerful brand certainly in family entertainment,” Iger said when consumers see the live-action “Little Mermaid” in May, people will be reminded “just how strong the brand is.”
He also said the core franchise content, which includes Marvel, “Star Wars,” and “Frozen,” would remain exclusive to Disney’s owned platforms, but seemed to suggest that some Marvel characters could be on the chopping block.
“What we have to look at at Marvel is not necessarily the volume of Marvel storytelling, but how many times we go back to the well on certain characters,” Iger said. “Sequels typically work well for us, but do you need a third or a fourth, for instance? Or is it time to turn to other characters? There’s nothing in any way inherently off in terms of the Marvel brand. I think we just have to look at what characters and stories we are mining.”
“And if you look at the trajectory of Marvel over the next five years, you’ll see a lot of newness,” he added. “Now, we’re going to turn back to the Avengers franchise, but with a whole set of different Avengers, as an example.
As for Star Wars, Iger said the company is slowing its roll but is still “developing” films.
“Star Wars, we made three what we called saga films, which is obviously the successors to George Lucas’ first six. They did very well at the box office — tremendously well as a matter of fact,” he said. “We’ve made two so-called stand-alones in Rogue One and Solo. Rogue One did quite well, Solo was a little disappointing to us. It gave us pause just to think maybe the cadence was a little too aggressive. And so we decided to pull back a bit. We still are developing Star Wars films. We’re going to make sure that when we make one, that it’s the right one, so we are being very careful there.”
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