Which Disney Questions Did Bob Iger Answer in 2023?
As we finish 2023, many people look back at the year and evaluate what has happened.
With a business like The Walt Disney Company, change has become a natural part of the process.
After all, a company doesn’t last for a century unless it’s willing to update and innovate.
Disney managed this feat in the face of challenging circumstances this past year.
Here are five questions that Bob Iger answered in 2023.
Iger Decides on Hulu
During a CNBC segment on Friday, December 15th, Yahoo! Finance analyst Alexandra Canal discussed the top ten business stories of 2023.
One of the selections was Bob Iger’s return to Disney, which Yahoo! ranked as the ninth-biggest story of the year.
As part of this discussion, Canal listed the five questions that Bob Iger answered during his first full year back at Disney.
While we can nitpick about some of the selections – I wouldn’t have chosen the topic we’ll discuss next – it’s a fair and well-reasoned list.
Fittingly, Canal starts with the subject that will define Disney’s short-term future the most.
In early 2023, Iger faced a dilemma with Hulu, the streaming service Disney acquired as part of the Fox assets purchase in 2019.
Disney only bought one-third of Hulu from Fox, and it already owned one-third on its own. Comcast owned the final piece.
At the time, Disney and Comcast were squaring off in several different battles, including the Fox purchase and a previous one for Sky.
The two corporations agreed that they would kick the can down the road on Comcast’s ownership interest in Hulu.
Disney would control all daily operations, but it wouldn’t buy Comcast’s one-third stake in Hulu until 2024.
Comcast made a value play that Disney would boost Hulu’s worth. Instead, Disney primarily did the opposite.
Disney chose a company called Star/Hotstar to develop internationally in lieu of Hulu, which remains primarily an American streaming service.
When Iger returned, he had two choices. He could sell Disney’s two-thirds of Hulu to Comcast for tens of billions of dollars, or he could buy out Hulu.
Both parties jostled for negotiating supremacy throughout the year, but the matter resolved itself in the expected way.
Disney has paid Comcast $8.6 billion for Hulu.
Iger Chooses Digital for ESPN
During the interview, Canal discusses Disney’s debate regarding the future of ESPN.
The analyst finitely states that Iger has chosen not to spin off the streaming service, instead plotting a path to take it fully digital in 2025.
I don’t view those scenarios as an either/or choice. Disney could feasibly do both, which is why I wouldn’t have included this “answer” on the list.
Instead, what Iger stated is that Disney fully intends to bring the “Flagship” product into reality.
That’s the strategy wherein ESPN flips from being primarily a cable television channel to a fully digital one.
Now, you may wonder why this isn’t ESPN+, and that’s a fair question.
Currently, ESPN+ subscribers are painfully aware that much of the best live sports content isn’t available on the service.
Disney’s cable carrier agreements ensure that people must watch the programming that way.
Well, this broadcasting behavior will change in 2025 when ESPN content switches to ESPN+.
When that happens, you can expect to pay a LOT more for the “Flagship” service, whether it’s ESPN+ or something entirely new.
So, we don’t know for sure whether Disney will spin off ESPN nor do we know the details about how Flagship will work.
Instead, all that Iger answered in 2023 is that he’s committed to live sports as a method of marketing Disney’s top products most effectively.
Iger Develops New Streaming Strategy
Some of these “answers” come with a lack of finality, which is often the case in the business world.
For example, I said earlier that Disney paid Comcast $8.6 billion for Hulu. That’s only partially correct.
The parties agreed to arbitration to decide the exact price. While Disney has wired Comcast $8.6 billion already, it may yet pay a few billion more.
That’s a hefty price for a service I just described as primarily exclusive to the United States. Why would Disney do that?
The answer is that Iger has course-corrected on some of Bob Chapek’s most ambitious moves.
Disney’s former CEO viewed the company’s future as digital. He understood that Wall Street adds stock price multiples for digital services.
What Chapek failed to understand is that investors eventually need you to turn a profit.
Iger has always recognized this reality and scaled back Disney’s digital ambitions.
In a word, Disney’s new streaming strategy is “profitability.”
At Iger’s request, Disney+ and Hulu raised prices multiple times during 2023.
As a reminder, before Disney+ debuted, many Disney fans could purchase three years of service for the equivalent of $4 per month.
You…cannot get that deal now. Much has changed.
Similarly, Iger cut costs through layoffs and reduced streaming service content.
In the short term, Disney will rely on catalog titles and live sports to drive enthusiasm for its Direct-to-Consumer divisions.
This change, while financially necessary, may impede Disney’s subscriber totals in 2024.
Iger Reverses Chapek’s Theme Park Errors
Here’s a topic where I fully agree with Canal.
I would describe 2023 as something of an apology tour by Iger to Disney theme park fans and workers alike.
During this calendar year, Disney has negotiated deals with Disneyland and Walt Disney World cast members, ensuring union peace for years.
Meanwhile, Iger brought back theme park icon Bruce Vaughn to co-lead Imagineering alongside Barbara Bouza.
Then, Iger and Parks Chairman Josh D’Amaro uncovered several methods to mollify irritated park fans.
Disneyland ensured more admission tickets at the cheapest price of $104. And it added several incentives, including half-off deals for kids’ tickets.
At Walt Disney World, Disney restored free parking at hotels and announced several exciting changes coming in 2024.
We’re talking about the return of the one true version of Park Hopper, sales of the Disney Dining Plan, and consistent annual pass availability.
In short, Iger practiced what he preached in maintaining that Disney should always be affordable enough for everyone to visit.
Independent of what you think about anything else Iger did in 2023, he definitely took a stand for fair theme park pricing and guest amenities.
Also, as Canal reminds us, Disney has filed the paperwork to spend $60 billion on theme parks over the next decade!
Iger Takes DeSantis to Court
While Bob Chapek mishandled seemingly every aspect of Disney’s response to Florida’s Don’t Say Gay bill, Iger got plenty right.
In fact, Iger turned a seemingly impossible situation and found a solution that totally outflanked Florida Governor Ron DeSantis.
Canal summarizes the tiff by stating that “Disney essentially won that battle.”
Of course, DeSantis became the ultimate sore loser in rewriting Florida laws to punish Disney that much more.
So, Iger did the only thing he could after working within the framework of the law failed.
He sued DeSantis and the Central Florida Tourism Oversight District.
While we won’t know the outcome for a while, Canal lauds Iger for his handling
Canal summarizes Iger’s overall job performance by saying:
“So, all in all, quite the productive year for Iger despite all of these obstacles for Disney.”
This evaluation aligns with my State of Disney article yesterday.
No, this isn’t the popular thing to say, but Iger had a good 2023 overall. Canal and I agree on this point.
FEATURE IMAGE Disney CEO Bob Iger (Getty Images)
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