Bob Iger admits Disney+ exclusivity error in streaming wars

Speaking at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco, Iger said he was “extremely bullish” on streaming, but acknowledged the company needed to rethink some of its strategies when it came to its own streaming platform Disney+.

“As we look to reduce the content that we’re creating for our own platforms, there probably are opportunities to license to third parties,” he said, noting that this had not been a possibility “for a while” because Disney was favoring its own streaming platforms.

“But if we get to a point where we need less content for these platforms, and we still have the capability of producing that content, why not use it to grow revenue?” Iger pondered. “That’s what we will likely do.”

He confirmed, however, that content made by Disney’s core brands—like Disney, Pixar and Marvel—would stay “in house.”

During Iger’s first 15-year tenure as Disney’s chief executive, the entertainment giant made huge bets on content, buying up Pixar, Marvel, Lucasfilm and 21st Century Fox, and launched the company’s flagship streaming service Disney+.

While Disney licenses some of its titles to other streaming platforms, it began restricting how much of its content was being made available to its rivals with the rollout of Disney+ in 2019.

However, Iger suggested on Thursday that some of the content that fell under Disney’s huge umbrella of brands and titles could be used as revenue generators by allowing the company’s rivals greater access to their licensing rights.

“It’s already clear to us that the exclusivity that we thought would be so valuable to us in growing subscriptions, while it has some value, it wasn’t as valuable as we thought,” he said.

Iger used Disney’s adult animation portfolio as an example of content that could be licensed out to third parties, noting that it had acquired a slew of hit cartoon series like “Bob’s Burgers” and “Family Guy” when it purchased 21st Century Fox.

He told the Morgan Stanley conference that the billions of hours of this content consumed on Hulu were “extraordinary.”

“That suggests there is opportunity to license that content to others first, as ‘The Simpsons’ is done,” he said. “It’s one of the more popular programs on Disney+, yet it’s been on the Fox network. You can still [license content] that does extremely well on streaming, but we’re driving more revenue with a balanced model of licensing to third parties and streaming to ourselves.”

Iger, who returned to the helm of the entertainment giant in November after just 11 months away from the company, told employees upon his return that profitability would be made the top priority for Disney’s streaming business.

Weeks earlier, Disney’s streaming reported a quarterly loss of $1.5 billion—more than double its losses from a year earlier.

Under his successor (and predecessor) Bob Chapek, Disney invested billions into its streaming platforms, drastically increasing spending on original content as part of its growth strategy. That strategy helped the company build up a subscriber base to rival Netflix, but Disney warned when it published its fourth-quarter earnings that streaming growth could soon begin to fade, and streaming losses have been on shareholders’ radar over the past year.

Last month, Disney reported its first Disney+ subscriber loss since the platform launched, dropping 2.4 million subscribers in the final three months of 2022.

Iger said on Thursday that Disney had been “off” with its Disney+ pricing plan in its “zeal to grow global subscriptions.”

At the end of last year, Disney launched a cheaper, ad-supported Disney+ subscription option in the U.S. in a bid to boost both subscriber numbers and revenue through advertising.

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