Latest Business News
Disney CEO Bob Iger Considers Selling Linear TV Assets as Media Industry Shifts to Digital
Iger's Contract Extension and Challenges Ahead
Disney CEO Bob Iger recently appeared on CNBC to discuss his contract extension and the challenges the company is facing in the media industry's transition to streaming and digital offerings. With his contract extended through 2026, Iger acknowledged the challenges ahead and expressed his commitment to overcoming them. He mentioned that there is still a lot of work to be done and emphasized the need to address the company's biggest challenges head-on.
Major Restructuring and Cost Reductions
Since returning to Disney in November, Iger has implemented significant cost reductions and a major realignment of the company. This includes a sweeping restructuring that resulted in thousands of layoffs and billions of dollars in spending cuts. Disney reorganized into three segments: Disney Entertainment, ESPN, and parks, experiences, and products. The company also announced a $5.5 billion cost-cutting plan, focusing on content and non-content costs.
Focusing on Streaming and Profitability
In addition to his responsibilities in finding a successor, Iger has been tasked with bringing Disney's streaming business to profitability. Like other media executives, he is exploring strategies to make streaming profitable, especially after Netflix experienced a loss of subscribers. Disney's flagship streamer, Disney+, also saw a decline in subscribers. To mitigate this, Disney has increased prices and introduced an ad-supported tier to drive revenue. The company plans to add Hulu content to Disney+ to attract more subscribers.
The Future of Hulu
Disney has been considering acquiring Comcast's remaining stake in Hulu, of which it currently owns 66%. It is likely that Disney will purchase the stake in 2024. This move aligns with Disney's goal of creating a combined platform for Disney+ and Hulu content, which would increase advertising potential.
Upcoming Earnings Report
Disney will report its fiscal third-quarter earnings on August 9. The market is eager to see how the company is faring in the midst of its streaming efforts and the media industry's digital transition.
The Impact of Disney's Shift to Digital on New Business
Disney's CEO Bob Iger's consideration of selling linear TV assets and the media industry's shift to digital have significant implications for new businesses entering the market. As Disney, a media giant, focuses its efforts on streaming and digital offerings, smaller businesses need to adapt and align their strategies with the changing landscape to stay competitive.
One hot take is that the move towards digital and streaming presents both challenges and opportunities for new businesses. On one hand, the increased emphasis on streaming platforms provides a chance for startups to capture a share of the growing market. With Disney's efforts to make streaming profitable, there is a demand for quality content from various players in the industry. New businesses can seize this moment to create innovative and compelling content that resonates with audiences.
On the other hand, the dominance of established streaming platforms like Disney+ poses a challenge for new entrants. With Disney's vast library of content and their plans to merge Hulu and Disney+, smaller businesses may find it harder to compete for subscribers and advertising opportunities. However, this shouldn't discourage new businesses; instead, it should motivate them to explore niche markets, unique content offerings, and innovative distribution models that stand out from the crowd.
Additionally, the upcoming earnings report from Disney will provide valuable insights into the success of their streaming efforts and the overall state of the media industry. New businesses should closely follow these reports to understand market trends and consumer preferences, allowing them to refine their strategies accordingly.
In conclusion, the digital shift in the media industry presents both challenges and opportunities for new businesses. By staying adaptable, innovative, and closely following industry developments, new businesses can position themselves for success in the evolving landscape of streaming and digital content.
Article First Published at: https://www.cnbc.com/2023/07/13/disney-ceo-iger-opens-door-to-unloading-tv-assets.html