Which of These Current Disney Problems is Bob Iger’s Fault?
After a 48-hour bout of euphoria, Wall Street analysts have changed the tone of the conversation about Bob Iger.
At first, everyone was gleeful about Bob Chapek’s demise as CEO. It was definitely a lot of “Ding dong! The witch is dead!”
Now that Iger is back in charge, analysts are remembering how many of Disney’s current problems date back to Iger’s regime.
So, let’s examine which of Disney’s current problems are Bob Iger’s fault.
The Disney+ Expenses
Here’s the problem that got Chapek fired. I’m not saying he would have survived indefinitely without it, but the cost of Disney’s content set him.
Disney lost $4 billion on its digital content during fiscal 2021. In addition, the perception remains that as subscription totals increase, the losses deepen.
Chapek didn’t feel that way. He anticipated a turnaround thanks to the impending addition of advertising revenue on Disney+. But unfortunately, that market has recently collapsed.
Is Chapek to blame for this turn of events? Absolutely not!
Out of everything we discuss here, this criticism ties back to Iger the most. It was his plan to reinvent the former linear television model for the digital era.
Iger recognized the emerging threat of Netflix significantly earlier than the people running NBCUniversal, Paramount, and Fox.
For this reason, Disney got out in front of its rivals when it acquired BAMTech, the service that has provided the backbone for Disney’s streaming businesses.
Iger believed that he could sustain the struggling ESPN long-term by converting it to a digital platform.
Similarly, one of the benefits of acquiring Fox’s assets was that it gave Disney complete control of Hulu.
Iger spent billions of dollars gearing Disney up for its digital future. So, when Chapek identified Disney as a digital company, he was merely following previous marching orders.
As we’ll discuss in the final section, Iger’s move appears prophetic. Still, the current financials are problematic enough that Chapek’s out of a job.
If streaming does prove an albatross to Disney, Iger takes the L here.
The Loss of Park Amenities
In 2019, Disney fans could buy annual passes and dining plans whenever they wanted. They had no need for Park Passes, either.
We could come and go as we pleased thanks to convenient policies and superior amenities.
Since then, Disney has ended Magical Express, shortened Extra Magic Hours by half with Early Theme Park Entry, and raised the price of…well, anything with a price tag on it.
Despite Disney’s promises, the dining plan never returned in 2022. Magic Key and Walt Disney World annual passes remain unavailable, and Park Passes are annoying.
As a reminder, Park Passes were supposed to be temporary during the pandemic. They were kept because they benefited Disney, not its customers.
Who gets the blame for these moves? The answer is totally Bob Chapek. In fact, reports have surfaced that Iger frequently campaigned against such moves.
So, Disney’s new CEO is acutely aware that Disney park guests are paying more while getting less today.
The Perceived Decline of Star Wars and Marvel
First, I don’t even agree with this notion even though I read social media enough to recognize it’s out there.
Some people feel that Phase Four of the MCU has been a bust. I strongly disagree with this assessment. Here’s a discussion from our sister site, MarvelBlog.
You’ll note that I find the overwhelming majority of Phase Four projects quite good to excellent. And WandaVision is on the short list of best things ever in the MCU.
Similarly, people point to the diminishing returns for the Star Wars films in theaters, most notably the lackluster performance of Solo: A Star Wars Story.
While Star Wars television programs have done quite well on Disney+, people had criticized their quality as well, at least until Andor arrived.
How much of that is Iger’s fault? Well, the most recent trilogy and the standalone Star Wars films were his call.
So, if you don’t like them, he bears the brunt. However, save for The Mandalorian, most Star Wars Disney+ projects occurred under Chapek.
If you’re not a fan of any of those, realistically, you have a problem with Kathleen Kennedy rather than either Disney CEO, though.
The Rising Cost of Disney Parks
The primary way that Chapek and Iger differ philosophically about the parks is that Disney’s current CEO believes they should remain affordable for all.
Chapek, on the other hand, didn’t care who came and went, as long as the checks cleared.
If Chapek could have sold one ticket to Jeff Bezos or Elon Musk for $1 billion for the day and locked everyone else out of the parks, he would have.
Iger totally gets a pass on this topic. In fact, his heart is in the right place on the subject.
I expect that he’ll quickly make some moves to generate goodwill with loyal, recently mistreated park fans.
The Unstoppable Decline in Linear Television Revenue
This one is neither Iger nor Chapek’s fault. Really, nobody involved with the media industry takes any blame here. Instead, it’s merely a reflection of emerging technologies.
I vividly recall Academy Award winner Aaron Sorkin complaining that tech giants were too busy trying to put movies on a phone to worry about cell service.
At the time, the dedication to streaming video appeared to be putting the cart before the horse. With the benefit of hindsight, it was absolutely the right move.
The overwhelming majority of people watch video on our phones, which gives us less reason to watch conventional television.
Linear television ratings are in constant decline. If you don’t believe me, please consider that Survivor has aired on Wednesdays at 8 p.m. since 2010.
At the time, season finales claimed 13 million viewers. Today, that number is five million. Society has changed, which is a problem for Disney.
Much of its revenue during the 21st century has stemmed from linear television moves Michael Eisner and Bob Iger made. They turned ESPN, Disney Channel, and ABC into rainmakers.
Now, that revenue is in sharp decline, which Iger saw coming. In fact, he deserves a ton of credit for effectively reinventing cable television with Disney’s three streaming services.
Since advertising arrives soon, Disney will once again have its subscribers paying for the content while advertisers pay Disney to distribute ads.
Those two factors in combination ARE Disney’s linear television business model, although Iger reworked them for the digital era.
This impending change alone aptly demonstrates what a genius Iger is and why we’re all relieved to have him back in charge at Disney.
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