Disney CEO Bob Iger spoke at a Morgan Stanley media conference on March 9, 2023, and subjects he covered included the theme parks, Disney+, Hulu, Star Wars, Marvel, and more.
The Theme Parks
Since returning as Disney CEO, one of Iger’s top focuses has been the company’s theme parks.
During the conference, he acknowledged that Disney fans had a right to be upset as theme park ticket prices crept higher under the previous regime and admitted it wasn’t the best way to manage the brand.
“I always believed that Disney was a brand that needs to be accessible,” he said. “And I think that in our zeal to grow profits, we may have been a little bit too aggressive about some of our pricing. And I think there is a way to continue to grow our business but be smarter about how we price so that we maintain that brand value of accessibility.”
He continued, “And we made certain steps…we took certain steps when I came back to do just that, and they resonated extremely well with consumers.”
“And we’re not only going to continue to listen to consumers, but we’re going to continue to adjust.”
Bob Iger has already made decisions in response to Guests requests and complaints.
At Walt Disney World, complimentary self-parking at resort hotels has returned, annual passholders won’t need reservations soon in the afternoons on weekends, and Guests will receive free photo downloads with Genie+ service.
At Disneyland, Iger expanded park-hopping hours and added more of the lowest-price day trip tickets, as well as the complimentary photos.
Going forward, Iger said the company will continue to look at ways to reduce crowding.
“It’s tempting to let more and more people in, but if the guest satisfaction levels are going down because of crowding, that doesn’t work. We had to figure out how do we reduce crowding, but maintain, obviously, our profitability.”
Iger then touched on adding more attractions/capacity at the parks, as well as opportunities for growth.
“We, certainly in Florida, have a lot of property and we have a lot of opportunities outside the United States. We actually have more opportunity in California than people are aware,” Iger explained.
“As we continue to invest in those businesses, which is essentially building out new capacity or new attractions…it gives us the ability to service more people. The more attractions you have, the more people have to do.”
He then talking about incorporating the company’s films and TV into the parks.
“We can also mine our intellectual property (IP) more carefully. We announced in an earnings call that we are going to build an Avatar experience at Disneyland. It’s done extremely well in Florida.”
“Those are really important because those franchises that we do well with in film and in television are truly levergable at the parks as we learned with the Star Wars investments we’ve made. The Toy Story investments we’ve made,” he continued.
“And that creates growth for us because it increases capacity and improves our marketablility…with IP in mind, we almost have an endless opportunity there…And if you price and market it well, and manage your costs so you can maintain pretty decent margins, it’s a business…obviously we’re betting on it…and I would bet on it.”
Disney+ and Hulu
Iger also talked about his optimism about making streaming, particularly Disney+, a profitable piece of the empire.
“I’m generally bullish on streaming as a great consumer proposition, as a really robust platform to deliver high-quality content,” Iger said.
“(the) whole streaming business — other than Netflix, which is relatively mature — is a nascent business for most of us. And we’re also at an interesting point in the world, from a media perspective, where a lot of people are still getting linear programming and while I have said publicly that I don’t think the future of linear is very bright and eventually everything will migrate toward streaming, we’re not quite there yet.”
To get the segment to profitability, the company will be focused on trying to “figure out a pricing strategy that makes sense” for the platform, which Iger said could include taking a harder look at promotional pricing and free trials.
“In our zeal to grow global subs, I think we were off in terms of that pricing strategy. And we’re now starting to learn more about it and to adjust accordingly.”
“We grew at such a meteoric rate, we’re not going to see that kind of growth trajectory going forward,” Iger continued. “But in many of the markets outside of the United States that we’ve launched in, it’s still very, very new. And I think that there’s sub growth ahead, particularly as we get more consistent in terms of our content delivery.”
As far as Hulu, Iger said, “What we’re doing right now — because we own two-thirds of Hulu, and we have an agreement with Comcast that may result in us owning 100 percent — is we’re really studying the business very, very carefully, all those competitive dynamics with an understanding that we have a good platform in Hulu.”
“We have very strong original programming, actually highly awarded original programming, some delivered by FX, which is a great, not only producer, but brand, and we also have a good library, so it’s a solid platform.”
“And it’s also a very attractive platform for advertisers. It’s already proven to be valuable for them and advertising is proven to be valuable for us. But the environment is very, very tricky right now and before we make any big decisions about our level of investment, our commitment to that business, we want to understand where it could go.”
Star Wars and Marvel
Bob Iger also briefly talked about the Marvel and Star Wars brands, and how Disney may be reevaluating its strategy.
He questioned whether or not Marvel needs to continue churning out multiple sequels for individual characters…comments that come on the less than stellar reviews and box office received by the latest Marvel movie, Ant-Man and The Wasp: Quantumania.
“Sequels typically worked well for us,” Iger commented. “Do you need a third and a fourth, for instance? Or is it time to turn to other characters?”
“There’s nothing in any way inherently off in terms of the Marvel brand,” Iger added. “I think we just have to look at what characters and stories we’re mining, and you look at the trajectory of Marvel over the next five years, you’ll see a lot of newness. We’re going to turn back to the Avengers franchise, but with a whole different set of Avengers.”
As for Star Wars, Iger noted that the company made two “standalone” films: Rogue One, which did well (and spawned the critical fan favorite series, Andor), and Solo, which “was a little disappointing to us,” he said.
“Solo’s underwhelming performance gave us pause just to think maybe the cadence was a little too aggressive and so we decided to pull back a bit. We still are developing Star Wars films. We’re gonna make sure when we make one that it’s the right one. And so we’re being very careful there.”
His Successor
Bob Iger called finding his second successor a top priority as he moves to turn the company around and, with the board of directors, name a new chief executive before the end of his two-year contract.
“Succession is pretty much at the top of the list,” Iger said, “We all know that not only is it an important decision but that we don’t have endless amount of time to make it, and we are mindful of that. Conversations have been great. I am confident that we will identify the right successor at the right time.”
Bob Iger covered a lot in his talk. Which of the topics was of most interest to you? How do you feel about his remarks? Let us know in the comments.