Former Disney CEO Bob Iger Says Streaming Is ‘Here to Stay,’ Not Oversaturated
Despite what many analysts have said following recent Wall Street losses for Netflix and Disney+, former Disney CEO Bob Iger does not believe that streaming services are oversaturating the market. He reiterated that market fluctuations were planned for during a discussion at Australia’s 2022 Macquarie summit according to the Sydney Morning Herald.
Iger led the charge for Disney to move into the streaming space during his stint as CEO, even though the venture was a costly one. Explaining that an initial loss was not only manageable but also expected, he was pleasantly surprised that investors readily backed the idea of a Disney-dominated streaming industry.
“We had to tell Wall Street … basically, don’t worry, we’re going to reduce our profitability by a couple of billion dollars, but this is what we’re doing,” Iger told his Australian audience on Tuesday. “We were actually surprised pleasantly that they applauded the move. They believed that if anyone had the ability to do it, it was us.”
With Disney and Netflix shares dropping by 60% and 70% respectively, Iger reiterated that this is not a cause for concern, but simply a set of speedbumps on the road as streaming services adjust their strategies. While the industry has grown quickly, its current slowdown suggests that streamers are discovering new challenges that Iger believes will eventually be overcome, stabilizing the market.
“We’ve seen tremendous growth very fast,” he said. “We’re now seeing some of that growth, basically slowing a bit, but some of the issues that some of these businesses face are rising to the surface… but I think [streaming] is here to stay.”
During the advent of Disney+, Iger had to contend with a lack of infrastructure for a new streaming platform, a costly venture in and of itself. In addition, licensing agreements with outside streamers that were quite lucrative for the House of Mouse were canceled in order to provide exclusive content on the Disney+ platform. These challenges alone would put Disney in a poorer financial position, but once the streaming service becomes fully established in the marketplace, it should quickly regain its profitability.
Iger certainly has the data to back up his assertions. A recent Omdia report illustrated the increased growth of streaming services, even as the U.S. market reaches a saturation point. Conviva’s “State of Streaming” study reported a 20% increase in viewership continent-wide during the fourth quarter of 2021. With cross-platform subscribership potentially topping 2 billion worldwide by 2027, it appears that streamers that are focusing on international markets have settled on the best strategy.
Disney has been reaching its white-gloved hand into a number of new markets across the globe in recent months. Partnering with Starz, Disney launched a bundled service package in seven Latin American countries while also expanding its signature platform into 24 countries in the Central and Eastern European (CEE) markets.
The streaming market is a new beast, and as it grows, certain financial pitfalls are inevitable. As streamers pay more attention to lucrative foreign markets, the hope is investors will eventually side with Iger on the future of the streaming industry.
Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”