Bob Iger Says Disney Needs To Catch Up To Netflix’s Technology
Despite the headway that Disney has made in the streaming industry, Disney CEO Bob Iger knows that, at least technologically speaking, Netflix is still the gold standard.
During yesterday’s Morgan Stanley, Technology, Media & Telecom Conference, Iger admitted that Disney has some catching up to do to reach Netflix’s level.
“We need to be at their level in terms of technology capability,” he said.
Disney Needs Better Streaming Infrastructure to Improve Margins
According to the Disney CEO, it is the technological infrastructure that Disney needs to increase its direct-to-consumer margins and reduce expenses.
“When we launched Disney+ in 2019, our goal was to have basically robust video experiences at scale,” Iger said. “What we didn’t have was the technology that we needed to basically lower customer acquisition and retention cost, to increase engagement, to essentially grow our margins by reducing marketing expenses.”
Iger continued to explain that now that Disney has found its footing in streaming, it is developing the back-end technology to take its business to the next level.
“We’re now in the process of creating and developing all of that technology, and obviously, the gold standard there is Netflix.”
He also said Netflix’s technology is one of the reasons its margins are so much higher than Disney’s.
The Disney CEO’s Comments Echo Peltz, Blackwells
Interestingly, Iger’s latest comments echo concerns that activist investors Nelson Peltz and Blackwells have raised.
Peltz has continually called on Disney to reach “Netflix-like” margins in streaming, while Blackwells has questioned the technological expertise of the Disney board.
Iger, however, continues to believe that Disney’s leadership has the company pointed in the right direction. Yesterday, he reiterated that Disney is on track to achieve streaming profitability by September 2024.
“It’s not just about profitability. It’s about turning [streaming] into a real growth engine for the company,” he continued.
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