Disney CEO Bob Iger is stating in no uncertain terms that the company is looking to make its Disney+ streaming service a true competitor to Netflix.
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Speaking at the 2024 Morgan Stanley Technology, Media & Telecom Conference, Iger spoke about Netflix, saying, “We need to be at their level in terms of technology capability.”
“When we launched Disney+ in 2019, our goal was to have basically robust video experiences at scale,” Iger continued. “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. We’re now in the process of creating and developing all of that technology, and the gold standard there is Netflix.”
Disney+ has been one of the (if not THE) most inconsistent performers amongst the streaming platforms. While Disney has managed to draw big audiences for its premium franchise shows (Star Wars: The Mandalorian, Marvel Disney+ series), it’s also become something of a running gag for viewers to pick up and drop Disney+ in between each big event series – or for viewers to disengage with the service for long periods – even if they still subscribe.
Iger acknowledged some target areas where Disney has observed the need for better engagement, as well as the need to market the service (and its bundling) better:
“You’ve got a lot of young people who have not subscribed to the multichannel fat bundle, and you have a lot of people that used to be subscribers that lapsed,” Iger said. “We want them in… We’re trying to provide them a less expensive, more focused opportunity.”
That all said, Disney+ is still on tack to achieve profitability. But for Iger, that’s not enough: “It’s not just about profitability. It’s about turning [streaming] into a real growth engine for the company.”
One of the ventures Disney is pursuing to promote that growth is a joint venture between Disney, Fox Corp. and Warner Bros. Discovery, which will help put Disney’s ESPN+ and TV content from ESPN, TNT and FOx Sports into one app that can also be an add-on to Disney+, offering the live sports content (and commentary content) that will keep viewers coming back to Disney+ consistently.
Still, Netflix has the edge when it comes to being a vast library of licensed material from many sources. Disney is showing confidence in its Hulu streaming branch (and its international market cousin, Star) as great ways to rival Netflix in terms of content variety:
“Our plan is to continue to take advantage of linear [TV] in terms of the revenue and profits that it generates,” Iger said while adding that Disney will simultaneously be “making the transition” from traditional TV into the streaming future.”
