October 27, 2023
The return of Iger as a director, which was supposed to improve the situation at Disney, has not produced the results that investors had hoped for. A series of slip-ups and failures is said to have overwhelmed the 72-year-old director. Disney's shares are now down 9%, confirming the problems facing the company, which celebrates its 100th anniversary this year.
According to a Bloomberg report, the company was in worse shape on Iger's return to his post than he had thought. Every quarter, the Disney+ streaming platform loses hundreds of millions of dollars, impacted in part by soaring programme production costs. The promise to Wall Street that it will achieve a certain level of profits in 2024 will certainly not be fulfilled.
Iger acquired streaming company BAMTech in 2016. The deal turned out to be more expensive than expected, and BAMTech's technology proved less efficient than that of the competing company. The negotiated date for the purchase of a 33% stake in Hulu, which Disney is expected to buy for less than $27.5 million, is also approaching. The question is, will this amount last?
Not to mention the unfavorable opinions of Iger that emerged in response to his comment about the "unrealistic demands" of striking American writers and actors. The strikers then reminded him that his annual salary was $27 million. Iger's long holiday this year, which he spent on a private yacht in the Mediterranean, was also not without its comments.
The company's restructuring and cost-cutting, including cutting 7,000 jobs, have by no means produced the results that Bob Iger had hoped for. The Disney chief executive was also unaware of the state of the TV industry, which is losing viewers to streaming platforms. This situation will most likely result in Disney being forced to sell its television businesses (which include ABC, The Disney Channel, FX and National Geographic). ESPN desperately needs to become a streaming service. Losing hundreds of millions of dollars from streaming and further box office flops are other black clouds hanging over Iger's head. Many of his allies have left the company and the CEO himself feels increasingly isolated.
Iger's minor tweaks, such as raising the price of Disney+ subscriptions, changing the movie premiere calendar and entertaining ABC's sales pitch in a public forum, didn't help the company's situation. Changing his stance on the US writers' and actors' strikes to say that good relations with creative talent is a top priority for Disney has not improved its ratings too much. It turns out that sometimes returning to a position you held in a slightly different reality is not the best idea.
According to the latest news, once the US actors' strike is over, Netflix plans to raise the price of its ad-packed packages. Announcing the raise itself caused Netflix shares to jump 3% by the end of the day it was announced. The leading streaming platform has more clout than a 100-year-old company like Disney. This summer has been very unfavorable for Hollywood directors. I don't think anyone felt it more than Bob Iger.
#SzymonKarbowski #StreamVX #BobIger #Disney #Netflix
There’s more to see. So why not contact us so that we can show you what vxApps can do.
After all, there’s probably no time to waste. So complete the form to have the opportunity to work for a dynamic company and its cutting-edge technology of the video industry!
With a demo you get: