Topline
Disney CEO Bob Iger admitted Thursday the company’s move to raise customer pricing at resorts might have been a “little too aggressive,” as he mulled a future for the company that might not include the Hulu streaming platform, in major shifts away from the approach of predecessor Bob Chapek.
Walt Disney Company CEO Robert Iger delivers remarks during an event introducing Disney’s new “Magic … [+]
Key Facts
Iger said at the Morgan Stanley Technology, Media and Telecom Conference the company may have hurt its image among its most loyal customers with a series of pandemic-era shifts driven by its “zeal to grow profits.”
The company recently rolled back several Chapek-approved moves to boost revenue from Disney theme parks, like charging for parking at resort hotels, charging for photos on Disneyland rides and requiring park reservations for Disney World annual passholders, which many customers viewed as nickel-and-diming moves by the entertainment giant.
Iger also said Disney is looking “very, very carefully” at what to do with the company’s controlling stake in Hulu, giving his latest indication that he’s open to selling the platform, after Chapek repeatedly said the company planned to buy out Comcast’s stake.
Disney owns two-thirds of Hulu, but it has the option to buy Comcast’s third of the platform for a minimum of $9.2 billion in January, valuing Hulu as worth at least $27.5 billion as a whole—a deal Comcast also has the option of forcing to happen if it chooses.
It’s been speculated Iger’s public comments on Hulu—including his suggestion last month that “everything is on the table” for the streaming service—may be a negotiating tactic to soften the price for a platform Comcast CEO Brian Roberts recently plugged as a “phenomenal business,” though the $27.5 billion valuation is at the high end of analysts’ estimates.
Crucial Quote
“The environment is very, very tricky right now and before we make any big decisions about our level of investment, our commitment to that business, we want to understand where it could go,” Iger said of streaming services.
What To Watch For
Iger said he’s “very bullish” on the future of the Disney+ streaming platform, despite posting its first subscriber loss since it launched in 2019 in last year’s fourth quarter. The CEO added he believes the service, currently $7.99 a month with ads and $10.99 a month without, needs a “pricing strategy that makes sense,” as the company continues to lose money on streaming.
Key Background
One of Iger’s top focuses since reassuming his CEO role in November has been on cost cutting. Disney in January announced it was laying off 7,000 workers—about 3% of its global workforce—as part of a restructuring to cut $5.5 billion in spending. Iger has also made significant changes like reinstituting the company’s stock dividend and requiring hybrid staff to work in the office at least four days a week. Iger previously served as CEO from 2005 to 2020, overseeing a massive corporate expansion that included acquisitions of Pixar, Marvel and most of 21st Century Fox’s assets. Chapek succeeded him as his hand-picked replacement, but his two-year tenure was a rocky one, which included a public spat with actress Scarlett Johansson over releasing Black Widow on streaming instead of in theaters. Chapek was also blasted for post-pandemic price hikes at Disney resorts, and faced criticism from conservatives over denouncing Florida’s “Don’t Say Gay” bill—after getting blasted from the left and some company employees for supposedly taking too much time to condemn the legislation.
Further Reading
Disney Layoff 7,000 As Embattled House Of Mouse Announces Restructure (Forbes)
Robert Iger Returns As Disney CEO After Successor Bob Chapek Is Ousted (Forbes)
Source: https://www.forbes.com/sites/nicholasreimann/2023/03/09/ceo-bob-iger-disney-park-pricing-was-too-aggressive-and-hulu-might-be-worth-selling/