by Ray Keating
September 21, 2018
Business, in the end, is about venturing into the marketplace, and finding or creating opportunity. Walt Disney certainly understood that, and the Walt Disney Company’s current CEO, Bob Iger, grasps it as well.
A brief interviewwith Iger was published earlier this week by The Hollywood Reporter. What was reported reflected a generally healthy view of opportunity, success and failure on the part of Iger.
It’s About Opportunity and Innovation
First, the interviewer referred to changes in the content industry as an “upheaval.” Iger seemed to push back, instead talking about opportunity. He was quoted, “You call it upheaval, I guess that’s one way to describe it. I believe we have to look at this as opportunity versus threat. Meaning I’ve tried to manage this company … in a way that enables us to not only survive but to thrive in a world that doesn’t look anything like the world that existed just a few years ago.”
As for how to do that, Iger essentially spoke about quality (“make great content”), innovate in how you go to market, and look at the global marketplace. Those are sound, textbook-like points that can be appreciated by students, start-up entrepreneurs, and large, long-established companies. In a sense, all three points ultimately are about innovation, that is, bringing new ideas, methods and technologies to the market. If you’re in the content industry, you need to be about innovation. That has been the case since day one for Disney.
Getting Personal with the Consumer
Iger also went on to note, “You’re going to see growth in direct-to-consumer businesses.” Technology and innovative entrepreneurs are well under way in making this happen – from online streaming services like Netflix and Disney’s forthcoming product to podcasting to authors cutting out traditional publishers to reach potential readers to companies across industries and sizes seeing the wisdom in establishing a personal relationship with consumers thanks to a wide array of social media tools.
Disney Already Outspends Netflix – It’s about the “Pivot”
Specific to Disney entering the Netflix space, THR asked about whether or not Disney would spend as much on content for its streaming service as Netflix seems to be doing. At first, Iger gave the stand answer of “no.”
But as he went on, Iger made clear that the answer isn’t really “no.” In reality, Disney in fact currently spends a heck of a lot more on content than does Netflix. Iger alluded to this, and pointed out that it’s about the “pivot.”
Iger specifically said, “First of all, I don’t know what Netflix is spending. You may know more than I do. If you really look across all of our businesses and you include ESPN and ABC and ABC News and what we’re buying with Fox, we probably spend upwards of what they’re spending. It’s just that we’re distributing differently. So the pivot for us is not necessarily substantially more spending, it’s substantially different distribution. But while we’re migrating to new distribution models, we have to spend enough [to populate] the new distribution until we can move content on the older ones over.” Again, that’s a somewhat different message than what Disney has been saying up to this point, and is a more accurate assessment of the realities as Disney prepares to jump in to compete with the likes of Netflix and Amazon on the streaming front.
Iger also acknowledged that the transformational costs of making the pivot will cut into profits, temporarily, in order to seize on the vast opportunity emerging for a content leader like Disney. Once more, this is about seizing on opportunity, and taking some risks along the way. That’s not always easy for large businesses, but Iger, with the support of his board, is doing just that. It’s about not just surviving, but thriving.
Marvel and Star Wars
In terms of two major properties, Iger made clear that Kevin Feige will be overseeing the entire Marvel universe, including the acquired (re-acquired?) X-Men franchise courtesy of the Fox deal.
Iger also took the ultimate blame for doing too much too fast with the Star Warsuniverse. As for the future, there was a great deal communicated in what he both said and did not say on this front: “You can expect some slowdown, but that doesn’t mean we’re not going to make films. J.J. [Abrams] is busy making [Episode] IX. We have creative entities, including [Game of Thrones creators David] Benioff and [D.B.] Weiss, who are developing sagas of their own, which we haven’t been specific about. And we are just at the point where we’re going to start making decisions about what comes next after J.J.’s. But I think we’re going to be a little bit more careful about volume and timing. And the buck stops here on that.”
My guess is that it’s more than mere coincidence that Iger mentioned Abrams, Beniogff and Weiss, but not Rian Johnson. There’s no other way to put but that Johnson and Disney screwed the pooch with Star Wars Episode VIII – The Last Jedi. (Check out the DisneyBizJournal take on the state of the Star Warsuniverse, as well as my Authors and Entrepreneurs podcast on aStorytelling Debate from Star Wars.) It is my expectation that Disney wants to put that mess behind it as best it can.
So, in the end, nothing is guaranteed in the content industry – even for Disney. Failures will come up, and the question then is: What did you learn from that in order to make course corrections and to continue creating and/or seizing upon opportunities? Given what’s coming over the next year or so – including the new Disney streaming service, Star Warstheme parks opening in both Disneyland and Walt Disney World, the integration of Fox properties, Abrams’s Star Warsfilm, more on the Marvel front, and much more – we’ll get a feel for how well Disney has generated and capitalized on opportunity.
Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with the two latest books being Reagan Country: A Pastor Stephen Grant Noveland Heroes and Villains: A Pastor Stephen Grant Short Story. He can be contacted at firstname.lastname@example.org.