2
Credit: DisneyThis year will mark a huge change for The Walt Disney Company’s streaming service, Disney+, and will come during an immensely combative time for the House of Mouse. With billionaire outsiders banging at the doors and fans rallying against the so-called woke agenda, Disney aims to regain its lofty heights of success through cost-cutting, altering release schedules, and revisiting old favorites.
A big focus for Disney is, of course, its streaming offer, and one of Mouse’s top executives just spoke out on a new element of the Disney+ business.
Back in late 2022, former Disney Chief Executive Officer Bob Chapek was ousted from his position as leader of the company, with Chapek’s predecessor, Bob Iger, returning to the helm. The shock came after Disney’s struggle to turn the tide on theatrical releases following the pandemic shutdowns, the underperforming nature of Disney+, and complaints about the operations of the Disney Parks brand, among other factors.
Upon returning, Iger was swift to change the current Disney business in an effort to reclaim reputation and reliability. One of his more severe moves was to streamline the offer on Disney+. In a company-wide mission to cut costs by $5 billion, Iger ordered multiple titles to be purged from the streaming service, some–like Lucasfilm’s Willow–not having been out even a year.
Disney’s announcement on the logic behind the cull came by way of former Chief Financial Officer Christine McCarthy. McCarthy and Iger shared the details behind the decision on the Q2 earnings call last year.
“We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation,” said the former CFO. “As a result, we will be removing certain content from our streaming platforms and currently expect to take an impairment charge of approximately $1.5 to $1.8 billion.”
Previously, Bob Iger reaffirmed during the Q1 earnings call in February 2023 that Disney+ would be profitable (Disney+ profitability being a big point of contention for the company) by the end of fiscal 2024 after deeming it his number one priority. This trajectory was separately discussed by Macquarie Senior Media Tech Analyst Tim Nollen, who told Yahoo! Finance in January 2023 that Disney would reach break-even status during 2024, ushering in a major change for the company.
“They’ve signaled quite strong that they intend to get that service toward profitability over the next eight quarters, so sometime during fiscal year ’24,” Nollen said. “So as soon as four to six quarters from now, you could have the DTC, the Direct to Consumer, streaming services– which is Disney+, Hulu, and ESPN+– moving into at least break-even status…”
So, as we get deeper into 2024, and Disney+ continues to lose subscribers, will the Mouse House be able to end on a break-even or perhaps a profit? Disney’s position won’t be clear until the next earnings call in May, but it can be expected that Disney+ will be the main talking point from Iger.
Meanwhile, Luke Kang, the President of Disney Asia Pacific (APAC), has spoken to The Hollywood Reporter about how the new business in the APAC region has been performing and what differences and opportunities Disney+ poses in this area of the world. When asked what has surprised him since Disney+’s launch in APAC, Kang said that consumer interaction was a key factor in the programming development of the streamer.
Related: Disney+ Blasted By Parents Group, “What Comes Next? Live Stripteases in Fantasyland?”
“…the consumers are extremely sophisticated–not just in what they want in terms of content, but also in terms of product and engagement with the brand. All of that is magnified in the direct-to-consumer business because you have that direct link. Previously, in most of our businesses, we had that middle layer, and we were mostly a B2B business,” Kang said. “Now, we’re interacting with consumers directly. We knew our consumers were sophisticated, but how quickly they know when something is good or bad has really impressed us. That applies when something doesn’t work, but also when a title hits.”
Kang acknowledges the success of the Korean series Moving, which “became the globally most-watched international original on Disney+ in 2023,” per the interview. The executive also revealed that the return of Bob Iger as CEO changed the journey in which this part of the streaming business was going down. Kang details how their plan to build market share in Southeast Asia was initially through a mass strategy approach, but Iger’s order to focus meant Kang had to pivot the situation and go after a higher average revenue per user (ARPU) in the region.
Related: Disney’s Attempt to Simmer Content Purge Tension Savagely Backfires
When asked about what the highlights of the product are now, Kang explained that the global Disney franchise obviously holds weight all across the world but that Korean live-action and Japanese anime have been successes for the business in APAC.
“We don’t necessarily have to be all things to all people right away because they have more than one account. There are different angles we can pursue to grow our business, Kang said. “Many analysts wanted us to be a certain thing and to compete with a certain company, but what we have learned pretty quickly is that we have to chart our own course. We want to be a specific type of service for specific types of people in each of our markets — and, again, we can’t be all things to all people.”
These comments are slightly conflicting with Disney’s actions in recent months, which saw the entertainment giant buy out Comcast’s share in Hulu for over $8 billion and look to position itself with Fox and Warner Bros. Discovery over a sports streaming app. From the outside, Disney does look like it is trying to be all things to all people, or at least trying to cater to every taste and interest a fan may have.
Amid the Disney+ issues, the legacy company is currently dealing with an effort from billionaire Nelson Peltz, bolstered by former Disney executives Ike Perlmutter and Jay Rasulo, to gain a seat on the board. And then there’s the case of X (formerly Twitter) owner Elon Musk, who continues his barrage of criticism towards the company, even implying to his millions of followers that he may purchase the business.
Do you think Disney+ will reach profitability and change forever in 2024? Let Inside the Magic know in the comments down below!
From the Haunted Mansion to The Little Mermaid, Mary Poppins to WandaVision, Disney favorites can be streamed on Disney+ now.