It seems Disney CEO Bob Iger is tired of playing catch-up when it comes to streaming. He wants his company to lead the conversation, and Wall Street is on board with the plan.
Wednesday was a busy day for Iger, who started the morning with the Walt Disney Company’s fiscal year 24 first quarter earnings results. Disney told investors it is on track to meet or exceed its annualized savings target of $7.5 billion – to be achieved by the end of the fiscal year – with revenue for the quarter comparable to the 2019 quarter. previous year equal to 23.5 billion dollars.
This figure was slightly lower than the $23.77 billion expected by analysts, but observers were clearly more attracted to the company’s positive earnings per share (EPS) announcement. Disney said it expects EPS to rise a massive 20% over 2023 – to $4.60 – which is broadly above analysts’ estimates.
After hours, Disney’s stock price rose more than 6%, rising to more than $100 a share for the first time since spring last year.
An exuberant Iger, who has spent the past few months fending off proxy fights with activist investor Nelson Peltz, told investors that the tide of the business was finally turning.
In a statement along with the earnings call, Iger said: “Our strong performance last quarter demonstrates that we have turned the corner and entered a new era for our company, focused on strengthening ESPN for the future, building streaming into a profitable growth business, reinvigorating our movie studios and accelerating the growth of our parks and experiences.”
Iger, who is currently in his second job at the entertainment giant, then appeared on CNBC where he answered questions about a once-unimaginable new service that “bundles” sports assets from Disney subsidiary ESPN, Fox Corporate and Warner Bros. Discovery.
In announcing the new venture on February 6, Disney added that the three entities will each own a third of the platform with equal representation on the board of directors – just as was done with entertainment streamer Hulu when it launched – working together to an independent management team.
The new joint venture will go live later in 2024 and will be available via a new app. Disney added that subscribers to the latest platform will also have the option to “bundle” the product with Disney+, Hulu and Max.
More streamers?
The formation of a new brand from established platforms has raised questions about whether consumers will be put off by additional streaming options and costs.
Iger said the brand decided to partner with Fox and Warner Bros. Discovery to make their content as accessible as possible to consumers who don’t want to spread their money across a bunch of providers: “This is a big step… to serve the sports fan who didn’t subscribe to multi-channel, linear TV, or who perhaps was disenfranchised and didn’t want it.
“We have seen the decline of the linear cable and satellite package for years and are preparing for a world where this business is no longer as strong as it has been.”
Disney’s preparations for this new world have consisted of launching Disney+, which will soon host Taylor Swift’s Eras Tour concert film, and investing in its own content. It also acquired a majority stake in streaming service Hulu with the purchase of 21st Century Fox in 2019.
“All of these things have also prepared us to change direction as the world changes as the world gets disrupted,” Iger said in the Feb. 8 interview. “By the way, I would rather be a disruptor than be disrupted.”
Disney did not immediately respond Of luck request for comment.
Catch Netflix
Despite the rise in Disney’s stock price, 2024 will still mark a difficult year for the company.
In its earnings statement, the company said it plans to achieve combined profitability across all of its streaming platforms by the fourth quarter of fiscal 2024, with first-quarter direct-to-consumer operating losses reduced by $300 million compared to ‘last year.
Despite being far from profitable, Iger stressed that Disney’s model is still in its relative infancy. “Netflix had a 10-plus year lead on us,” she said. “We launched Disney Streaming just over four years ago. In many ways it is still a nascent business, very successful when you consider the number of global submarines we signed right away and obviously since then.”
Iger also noted that some aspects of the Netflix model — from its controversial crackdown on password sharing to its global content — are not just aspirations but are something Disney is “working on in terms of realizing,” Iger said.
“You don’t just snap your fingers and get there,” Iger added. “I’m not suggesting that we need to be patient about it. We have a lot of work to do, some of it takes time. We’re going to turn that business into a business that we’re proud of in terms of margins – we know a lot more about the subject and how to do it than any outsider will tell us or instruct us.