Bob Iger Vows To Slash More Budgets, Pour Billions Into Failing Disney+

in Disney, Movies & TV

The image features a large assortment of movie and TV show posters, forming a colorful background mosaic. In the center, prominently displayed, is the Disney+ logo, indicating that the platform offers a wide variety of content.

Credit: Inside the Magic

Disney CEO Bob Iger promised one thing when he returned to lead the Mouse House: he would slash budgets, lay off employees, and make investors money. He’s now keeping the first two parts of that promise by cutting yet more money for traditional television and pouring even more billions of dollars into the struggling Disney+ streaming service.

Bob Iger with a serious expression, beside the white disney logo on a blue gradient background.
Credit: Inside the Magic

Can Disney Ever Make Streaming Profitable?

Bob Iger has pinned the entire future of The Walt Disney Company on Disney+, the popular but unprofitable streaming service. Since it launched in 2019, Disney+ has only managed to make money in a single fiscal quarter (the most recent one), an achievement that Iger described as a significant turnaround in an earnings calls to investors.

Despite that, the news that Disney+ was actually making money caused the company’s stock to crash to an 18-month low, a sign that investors are not confident that streaming content is a good thing. Since then, Bob Iger has openly admitted that the launch of the streaming service was botched and that the company had sunk far too much money into it, resulting in a multi-billion loss.

Related: 71% of Americans Reject Bob Iger’s Disney, Demand Return To ”Wholesome Programming”

Bob Iger, in a casual blue shirt, looks thoughtfully to the side with a digital stock market graph in the background displaying a downturn.
Credit: ITM

At the MoffettNathanson Media, Internet & Communications Conference, Bob Iger said:

“As we got into the streaming business in a very, very aggressive way, we tried to tell too many stories. Basically we invested too much, way ahead of possible returns. It’s what led to streaming ending up as a $4 billion loss.”

The success of shows like The Mandalorian, Percy Jackson and the Olympians, and X-Men ’97 have not been enough to turn streaming content into a viable, stable revenue source for Disney, but Bob Iger has a solution for that. According to the CEO, the new plan is to slash budgets for traditional TV outlets like The Disney Channel and ABC and redirect that money to trying to keep Disney+ going.

X-Men '97 logo on multiple VHS tapes
Credit: Marvel Studios

Bob Iger: “Those Traditional Networks”

While at the MoffettNathanson Media, Internet & Communications Conference, Bob Iger also revealed (per Reuters) that Disney is reducing “pretty dramatically our investment in content specifically aimed at those traditional networks.”

Translated from Business Newspeak, that means that Disney is cutting the budgets of TV networks at the same time as it is reformatting and restructuring Disney+ to include everything from increased ads, personalized shopping experiences, and what amounts to actual traditional television channels, but streaming instead.

Streaming service synergy: hulu, disney+, and espn+ logos intertwined with colorful dynamic lines against a dark blue background.
Credit: Disney

Related: Disney+ Spent $156 Million on One Season of a Canceled Show, Report Reveals

Iger even stated that the company was essentially using the resources of traditional network TV to boost streaming content, saying, “We’re basically aggregating greater audience, and we’re amortizing costs and we’re using the marketing of the traditional network, really, to help in some cases. We’re doing that across the board, Disney Channel, ABC, National Geographic, and it’s working,”

The irony is that traditional Disney TV is actually doing great for the company right now and, according to Nielsen ratings, dominating both broadcast and cable watching time. But, for better or worse, Bob Iger has decided that the $5.5 billion of savings that he promised investors will come from mass employee layoffs, cutting the budgets of traditional TV, and definitely not his own compensation package. Disney+ will be the future, one way or another.

Do you think Disney is going overboard by investing everything into streaming? Tell us in the comments below!

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