Bob Iger, Disney’s returned chief executive, met with the company’s senior management. His soft promise to the crowd was that Disney would increase the power of people who create content. “It’s not about how much we create; it’s about how great the things are that we do create.” The balance of his comments about Disney’s future centered around support of plans by his predecessor, Bob Chapek, to cut costs and make Disney streaming operations more profitable. In other words, he will borrow Chapek’s playbook.
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Disney’s hiring freeze and employee downsizing were part of Chapek’s work to improve Disney’s margins. Iger said these could not change. In his first year as CEO, Iger could make $25 million. He will not surrender any part of what he will be paid to bring Disney’s costs down or as a symbol of shared sacrifice.
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Iger also said he would make Disney’s streaming business more profitable. He will not seek market share in exchange for making money. Chapek raised the low prices Iger had used to launch Disney+ and drive its market share. The initial price for Disney+ was $6.99, well below what most of its competition’s fees were at the time. Iger commented as the service was announced on November 12, 2019, “The launch of Disney+ is a historic moment for our company that marks a new era of innovation and creativity.”
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Chapek increased these subscription prices to move Disney’s streaming division toward profitability. He raised the ad-free version of the service to $10.99, up 38%, and a version with ads to $7.99. As he raised the prices, Chapek said the initial low prices were “pretty absurd.” Iger had set these launch prices much too low.
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Chapek is gone now. Yet, his plan to improve Disney’s financial fortunes remains.
Iger’s Disney Plans Look a Lot Like Chapek’s
© Courtesy of Walt Disney Studios Motion Pictures
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
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