Disney bets on streaming

When Bob Iger was 23, his first boss at the ABC told him that he would not have a chance of promotion.

“I hope he can live to see him wrong,” Iger, now chairman and CEO of Walt Disney, told Wharton management professor Adam Grant. Iger has published a new book, The Ride of a Lifetime: Lessons Learned from 15 Years as The CEO of The Walt Disney Company.

Even if the mentioned boss was eventually fired by ABC for misappropriating public funds, “When the boss tells you that you will not be promoted, and you are only 23 years old, it is difficult to ignore this statement.” Iger said, “I I just didn’t want to believe it. Fortunately, I ended up finding another job at the company that he couldn’t get involved with. ”

In his more than 40-year career in entertainment, Iger proved that he was by no means unpromotable—he first went up at ABC and then Disney, and the entertainment giant acquired ABC Television in the 1990s.

Since taking charge of Disney-a $ 236 billion empire spanning television, film, theme parks and many other industries, he has overseen a number of lucrative acquisitions such as Pixar Animation Studios, Marvel Entertainment, Lucasfilm (Lucasfilm) and others, in the summer of 2018, it spent $ 71.3 billion to buy 21st Century Fox.

The asset-related content and brand value, as well as the huge treasure trove of classic Disney movies, have become the cornerstone of Iger ’s latest big move-launched on November 12 by Disney +, with the goal of competing with Netflix for the top spot in streaming services .

Start with a forecaster
Iger’s career began with his dream of becoming a television host. At first, he found a job as a weather forecaster on a TV station, and this experience taught him that he was more suitable to work behind the scenes.

On July 1, 1974, Iger found a job as a production assistant at ABC and worked on the ABC Sports Channel for 13 years, including coverage of the 6 Olympics.

He was the head of ABC’s entertainment department when the company was home to many popular sitcoms, such as Home Improvement, Roseanne, and TGIF (Thank God Its Friday Thank you again for Friday) program modules, including “Full House”, “Family Matters”. In 1994, he was appointed President and COO of Capital Networks / ABC, the parent company of the television network.

“From one job to another, I have been struggling to improve,” he said. “The reason I got this position was the result of a combination of factors, including self-achievement, hard work, and never fear of coming to the front. Next chance, good luck, and many good teachers and friends. ”

Disney acquired ABC in 1996. In 1999, Iger was named president of Disney’s international business unit. In 2000, he was promoted to Disney COO, becoming the second-largest chairman and CEO of Michael Eisner. Number two.

Iger said he wasn’t sure if he could run Disney one day. “Until 10 years later, I was told by the board that I was getting the job.” “This is not what I dreamed of or what I was trying to fight for at the beginning … I have always been such a person, do the work that others have given me, try to invest hard, and then … get another opportunity. This is what it is– I never thought about the next opportunity until I was really close to success. ”

Iger received 15 interviews before getting the position of Disney CEO. At the time, Eisner had been working for more than 20 years, during which time he achieved great success, such as revitalizing the Disney downturn with popular hits such as “The Little Mermaid” and “The Lion King.” The animation division, which acquired ABC and ESPN, became a celebrity in his own way as the host of the television series The Wonderful World of Disney.

However, by the beginning of the 21st century, Disney was in trouble both creatively and commercially, and Eisner lost the trust of the company’s board of directors, including Roy E. Disney, nephew of founder Walt Disney. ). During Iger’s interview, he faced tremendous pressure to criticize Eisner.

“I refuse to do that-I’m still working for him, he has always been my mentor,” Iger said. “It’s disgraceful, disrespectful, and irrelevant to defend myself against me. … I told the board that I can do nothing about the past, but I’d love to talk about where I want to take the company and where the company needs to go. ”

Bet streaming
Iger believes that the company’s next step is to enter a direct-to-consumer platform, namely streaming media. According to a report from The Hollywood Reporter, apart from the deal with Fox, Iger has invested $ 2.6 billion in technology for “Disney +”, at the expense of $ 150 million in copyright revenue on the table- Terminate the movie company’s agreement to play its content on Netflix.

“Hollywood Reporter” reported that “Disney +” users can watch nearly 500 Disney movies and more than 7,500 classic TV series for a monthly payment of $ 7. “Disney +” will be the home of many original series, extending to the Marvel and Star Wars series, as well as the live-action version of Lady, the remake of Tramp, and the hit TV movie “Youth” (High School Musical).

“When I got this job, I saw a world where technology empowers storytelling in more and more ways, and consumers have more choices.” Iger said, “Quality and brand are more than ever Important. Essentially, this means not letting finances hinder the achievement of great cause, not letting time hinder the achievement of great cause. Don’t be constrained by the investment of time and the amount of money. Greatness is both necessary and urgent.

The service went live in November 2019, and the company announced that fourth-quarter earnings were in line with Wall Street expectations. Revenue grew 34% to $ 19.1 billion, and Disney’s stock price rose 5%.

“Disney +” faces fierce competition from the existing leader Netflix in the streaming media field, and has many new entrants such as Apple +, HBO Max and Peacock. These companies are expected to be fully launched in 2020 (as part of the Fox deal, Disney will become (Hulu was previously a joint venture between Disney, NBC Universal and 21st Century Fox).

Disney expects that its streaming service will be between 60 million and 90 million users by 2024-in contrast, Hulu reported 28 million users in the spring of 2018, and Netflix reported 60.6 million in the United States Users, earlier in November 2019, reported 97.7 million users worldwide.

Iger told audiences at Wharton that the acquisition of Pixar, Marvel, Lucasfilm, National Geographic, and other household names are key to the future success of Disney +.

“Consumers have a habit of choosing the brand you know because it ’s valuable. If I say Nike, Apple, Mercedes-Benz, Pixar or Star Wars, you have a chemical reaction in your body, Iger said, “Because you know what you are buying is something you know and trust, there will be a sense of comfort.”

The existence of such a large library of existing content, combined with those brand names, is why for subscribers who have been overwhelmed by streaming options, Disney wants its streaming service to be a different value proposition.

“As we can see, we don’t compete directly because of the service’s brand proposition. This is a big reason for us to do so, and a big reason for our confidence. From a consumer perspective, with you from Netflix and Amazon This is a very, very different product compared to what you buy or buy from Apple, “Iger said.

Hierarchical processing
Many observers believe that for families with children, or big fans of Star Wars or Marvel’s Avengers, “Disney +” is a sure win. Others doubt whether “Disney +” has enough content to attract other key people. During the performance conference call, Iger stated that “Disney +” had conducted a successful trial run in the Netherlands and that the user group using the service was wider than expected.

In a Wharton speech, Iger said that the company’s acquisition strategy in recent years has helped it easily provide content to a variety of audiences, even if it is not clearly identified as Disney content.

“FX is one of the TV networks we acquired from 21st Century Fox and is known for more avant-garde shows. We acknowledge this because we don’t think it’s worthwhile to put these avant-garde content in the show, we think it’s telling a story Aspect has its corresponding purpose. “Iger said.

However, consumers should not expect to see FX TV shows like “American Horror Story” or “The Americans” air on Disney +. “Disney + will include Marvel, Pixar, Star Wars, Disney, and National Geographic,” Iger said. “It’s not FX, it’s not another Fox brand, it’s not Searchlight Pictures. We will give these to consumers individually. By.”

During the Disney performance conference call, Iger said that FX’s shows will take a larger share of Hulu, including current and previous shows, as well as original content produced specifically for Hulu.

Like his predecessor, Iger was also credited for reinvigorating Disney’s animation department. At the end of Eisner’s term, the animation department was in trouble again. Iger said that repairing the relationship with Pixar and then acquiring it is an important part of the strategy. It is also important to return the power of creation to the directors.

“We change the producer ’s medium back to the director ’s medium. The stories we tell are usually from the director ’s heart and mind. We ask them to tell us what (resources) you need to make the work great: how much time, How much. If we truly believe in you and your ideas, we will support you to implement it, “he said.

Iger is still very concerned about Disney’s bottom line, but he pointed out that no one has complained that a movie or TV series that is a creative and commercial harvest is spending too much money or that it was released later than expected.

What if these efforts ultimately fail?

“The failure of creation is inevitable; there is no guarantee that it will not be reduced to mathematics or science. You can trust the creator, the creativity, the execution, but you cannot know 100% whether something will happen,” he said “You have to figure out how to deal with it. You don’t want to sink in failure. You have to say it’s a business and move on.”

Speak cautiously
Iger says he is careful to use a targeted approach to advise creative projects-as CEO, he sees his role as weighing trade-offs such as story rhythm or clarity rather than small details.

He took a similar approach to deciding when and how to use the power of his status. For example, director Martin Scorsese made a critical commentary on Marvel’s film and made it to the news. He told Empire magazine that Marvel’s work was not a “movie.”

Compared to the public Scorsese debate (whose work “Angry Bull” is one of Iger’s favorite movies)-Igger sent a note through Scorsese’s production partners and managers to praise the director’s The new film “The Irishman” also mentions the team before and after the Marvel film, “They are fully committed to their work and have faith in what they do. Martin Scorsese People criticize them, which is very hurting. I don’t know what his motivation is. For them, I think I need to say that what he said is very hurting. ”

Although Iger doesn’t think it’s too different from his personal assistant in his 20s, when he first started earning $ 150 a week while working at ABC, he acknowledged: “I have more power to express opinions than ever before, Sometimes I hope so too, which affects the interpersonal relationships between the people I work with, the creative people, and even the people I deal with in my private life. Because of this, I am more aware of my opinions and how they affect people . I’m much more careful about how to use it, such as when I want to say it, what I say, and especially the way I say it. ”

Iger also made clear that his time at Disney is nearing completion-he plans to step down as CEO in 2021.

“I have a great job-who doesn’t want to manage Disney? It’s funny, no two days are the same. The industry I work in affects the world, and our impact on the world is incredible. I think it is now It’s time to make a change, and I’m almost there. I said I would leave in 2021, and I would leave in 2021. “