Disney CEO Bob Iger is a legendary figure in the business world, and for good reason. Over the course of his decades with the House of Mouse, he took huge gambles on risky strategies like spending billions to purchase Marvel Studios, Lucasfilm, 21st Century Fox, and Pixar Animations that have mostly paid off handsomely.
Iger massively expanded Disney Parks around the world (being directly responsible for the openings of Hong Kong Disneyland Resort and Shanghai Disney Resort) and helped revitalize Walt Disney World as the planet’s most popular theme park.
At the same time, the botched Disney CEO succession that transferred power from Bob Iger to Bob Chapek left the company on shaky ground. Box office receipts have dwindled across each branch of the company, Disneyland and Disney World have both experienced numerous disasters, and a prolonged legal battle between Disney and Florida Governor Ron DeSantis damaged the public perception of both.
Bob Iger has one solution for all of the Mouse’s ills: Disney+.
Disney’s proprietary streaming service is increasingly positioned as the company’s tentpole. As far as the Disney CEO is concerned, streaming content seems to be the way of the future, with all TV shows and movies eventually ending up on some form of online entertainment. Right now, the Mouse is locked in a cold war with Netflix, Max, Amazon Prime Video, and all the other streamers to assert dominance over the market, and it is not getting resolved any time soon.
There’s only one problem to the solution: Disney+ is failing.
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Bob Iger, Frustration, and Disney+ Billions
When Disney+ was launched to much fanfare in 2019, it had sky-high expectations from fans, skeptics, rivals, and investors. After all, the Walt Disney Company owns (arguably) the world’s most expansive and iconic catalog of entertainment, including Mickey Mouse and all his friends, Star Wars and Indiana Jones, the critically acclaimed Toy Story franchise and the rest of Pixar, the Marvel Cinematic Universe, Fox’s X-Men series, The Simpsons, National Geographic, Pirates of the Caribbean, The Muppets, and much more.
That amount of proprietary IP would make any rival studio nervous, but Bob Iger didn’t quit there when it came to the release of Disney+. It was initially offered at a rock-bottom subscription price of $6.99 a month, deeply undercutting the 2019 price tag of Netflix Basic ($8.99) and HBO Now ($14.99).
Additionally, Disney+ offered something no one else could in new original MCU and Star Wars shows, as well as the deep nostalgia imparted by the promise of providing every single piece of Disney’s century of media dominance. Well, except for Song of the South (1946).
At first, it seemed to work. A staggering 10 million people subscribed to Disney+ on the first day alone, and for a minute, it seemed like the streaming service might genuinely upset the market and displace Netflix as the leader of the marketplace.
That didn’t turn out to be the case. While the service currently boasts some 146 million subscribers, it has been losing customers more quickly than it has gained them. Since 2022, over 22 million subscribers have canceled the Mouse; the reasons behind the wave of cancelations can be debated, but the company’s diminished popularity and rising reputation as a “woke” bastion of the culture wars probably has something to do with it.
Another factor: the price of a Disney+ subscription has more than doubled since it first launched. A Disney+ Premium subscription (meaning no ads) currently costs $13.99, and the company has been feverishly pushing both commercials and the Bundle Package on consumers for months. Unsurprisingly, having to pay more for less content has not endeared many viewers to Disney+.
But worst of all, it turns out that the streaming service has been losing truckloads of money for the company ever since it first landed on the market. According to Forbes, Bob Iger sunk $11 billion into developing and launching Disney+ and it has failed to turn a profit every single quarter in the five years since.
In fact, Disney+ loses hundreds of millions of dollars every fiscal year, to the point where reducing the net loss to a mere $300 million in the final quarter of 2023 was considered an improvement.
Understandably, Bob Iger is pretty furious that Disney+, his envisioned future for his beloved company, is failing. He recently conceded to CNBC’sSquawk on the Streetthat the streaming service was not sustainable, saying:
“We ended up losing a lot of money on that, more so than we expected initially. Part of that was because we were chasing sub[scriber] growth and not as focused as we needed to be on the bottom line…I came back, and the losses were around $4 billion a year. It was clear that that was not sustainable and not acceptable, and the goal was first, let’s reduce those losses.”
Not only that, but Disney+ is currently getting swamped by pirate streaming services like Fmovies, which are outperforming its traffic on a regular basis. Disney+ can’t even manage to defeat illegal file-sharing sites, so how can it hope to overthrow Netflix and someday make a profit?
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Streaming War Battle Strategies
Since he returned as Disney CEO in 2022, Bob Iger has only doubled down on Disney+ as a main revenue source for the company. To his credit, it seems that Iger understands that the streaming service is not going to miraculously turn around and become profitable with its current approach, and he’s working overtime to do something about that.
Unfortunately, a whole bunch of these changes are not exactly making subscribers happy. Some are as small as changing the thumbnail logo of Disney+ on their smart TVs to a slightly different color, an innocuous change if there ever was one.
Others have far more impact on consumers, like the push to make as many people sign up for ad-supported accounts as possible. Most streaming services were initially presented as ad-free alternatives to traditional/linear television, it turns out that monthly subscription prices are not enough to fund the salaries of Ted Sarandos and David Zaslav.
Virtually every streamer is converting to ads being part of the viewing experience, and Disney+ has been particularly notable in its aggressive push to make anyone and everyone sign up for commercials.
At the same time, Disney has wide-ranging plans to transform Disney+ from a streaming content platform into a shopping and gaming “experience” and that consumers actually want more ads. Disney Advertising President Rita Ferro has stated that more than half of new Disney+ subscribers opt for the cheaper ad-supported options, and that the company is actively developing new technology to create a more immersive ad experience:
“We’re not renting or borrowing our technology…It’s no one else’s technology. We own it. And unlike others, who recently decided to get into the advertising business as part of their business strategy, Disney is in it from the beginning.”
Another new Bob Iger Disney+ strategy being considered is adding 24-hour “always on” channels to the streaming platform. These channels would be dedicated to specific content, like Star Wars or Marvel, and essentially replicate the experience of traditional linear TV; naturally, this new feature would feature ad interruptions and cost an additional subscription fee.
But that’s not the major change that Bob Iger wants to make.
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One App to Rule Them All
More than anything else, Bob Iger wants to turn the failing Disney+ streaming service into a multi-armed central app that includes the content catalogs of the Walt Disney Company, Hulu, and ESPN.
This makes a lot of sense from a business perspective. Considering Disney’s vast reach in virtually every form of media, centralizing all streaming content into a single service would be something that no other company, not even Netflix, can manage. However, there are still a few issues that Iger needs to work out before anyone can say that he’s out of the woods.
It will undoubtedly take additional billions of dollars to fully merge all three services into one. It may take an army of lawyers months to figure out all the contracts and paperwork that will need to be negotiated, and then there’s the technological aspect. While streaming content may appear all the same on a smart TV, different platforms use different programming, not all of which is compatible; the process of transferring Hulu content to Disney+ alone took months.
Then, there’s the price tag to consider. Although Bob Iger seems obsessed with centering ESPN as one of the crown jewels of Disney media, experts agree that a merged Disney-Hulu-ESPN+ app will almost certainly be one of the most expensive streaming subscriptions on the market. Disney is already struggling to justify its current cost to customers, so how will they feel about being forced to pay more for content they don’t necessarily want?
But one thing is certain: Disney+ is failing and has to change what it is doing if it ever wants to actually become the most popular streaming service in the world. In fact, it’s going to have to change if Bob Iger ever wants to make a single dime off it.
What do you want Disney+ to change? Tell Inside the Magic in the comments below!
