Very informative and well researched video by “The Market is Open” on the ongoing transformation of Disney, their business model & Bob Iger’s role (current CEO). Below are the key points.
Key Points
- Bob Iger came from ABC (Head of ABC Entertainment) when Disney acquired them in 1996. Iger was made President of Disney international in 1999 and COO in 2000. During the feud with Pixar, Iger proposed three options to the Disney board of directors.
- Keep the current management.
- Find a new management.
- Buy Pixar.
- Disney ended up acquiring Pixar in 2005 for 7.4bn USD. Michael Eisner resigned and Iger took on the role as CEO. This made Steve Jobs the largest individual shareholder of Disney, which explains why Disney (and Pixar) were always shown in Apple’s keynotes.
- Disney acquisitions: Pixar, Marvel Studios (4.2bn USD in 2009), Star Wars (Lucasfilm, 4.05bn USD in 2012), and now 21st Century Fox (71bn USD). This secures Disney years of content and blockbuster movie titles. Iger will stay on as CEO until 2021 to ensure a successful integration of 21st Century Fox.
- Disney’s most profitable division is the media networks (41%), rather than their movies (17%) or merchandise (8%) as most people think. Media networks includes cable networks (Disney channel, ESPN, etc.), broadcasting. However, the popularity and content from Disney’s movie segment drives increased revenue in its other segments such as consumer products & interactive media, parks & resorts (34%), and media networks. This is why Disney keeps on expanding their content through acquisitions.
- Disney’s acquisition of BAMTech has allowed them to venture into a direct-to-consumer business model through streaming. Its internally known as Disney Streaming Services.
- Disney now has 60% ownership of hulu (28 mill users) and is working on buying out the other owners.
- Disney Streaming Services will be: Disney+, ESPN+ and hulu and they plan to charge 12.99 USD per month. This is quite competitive with Netflix, Amazon and Apple. Disney is also removing its shows and movies from Netflix and bringing it to their own platform. Fox assets will also be available through Disney+.
- Disney+ launched 19th of November 2019.
- Over the last 10 years Disney stock has risen about 930% (2009 – 2019, update: its value has halved since March 2021 to December 2022).
- In 2020, Bob Chapek, who had been head of Disney’s parks division, took over the CEO position from Iger. However, after a tumultuous two-year period, Bob Iger returned as the CEO in November 2022.
- The number of Disney+ subscribers reached a new high of 164.2 million in Q4 of 2022. Disney’s combined direct-to-consumer subscriber count, including Disney+, Hulu, and ESPN+, amounted to around 235.7 million, surpassing its competitor Netflix in terms of subscriptions.
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