Disney shareholders have expressed their confidence in current CEO Bob Iger by voting to keep the company’s current board intact. However, this does not mean that Iger is out of the woods just yet. He will need to prove himself over the next 12 months by addressing several key areas of concern.
One of the main challenges for Disney is turning its streaming services, including Disney+, Hulu, and ESPN+, into profitable units. While Disney has set a target to turn a profit in its streaming TV businesses by the end of the fiscal fourth quarter this year, it will need to sustain and grow streaming profit to justify Iger’s strategy to focus on this segment. This will require cost-cutting measures and a clear plan to reduce losses in the streaming side of the business.
ESPN, one of Disney’s flagship brands, also faces challenges in the digital space. With the decline of the cable bundle, Disney plans to launch a skinny sports bundle in 2024 and its own flagship streaming service in 2025. However, this poses a risk of confusing consumers with multiple offers. Disney will need to roll out its new products with clear messaging and ensure that subscribers understand what they are paying for.
Another area of concern for Disney is its box-office performance. The company has been experiencing a yearslong slump in box-office revenues, with several big-budget franchise films underperforming. To change the division’s fortunes, Disney has appointed David Greenbaum as president of Walt Disney Motion Picture Studios. The company will need to focus on producing successful movies that can generate over $1 billion in revenue, like “Avatar: The Way of Water,” which was acquired as part of the 21st Century Fox deal.
Furthermore, the succession plan for Iger is crucial for the future of Disney. The company has been struggling to find a suitable successor for Iger, who has delayed his retirement multiple times. Internal candidates include Alan Bergman, Jimmy Pitaro, Josh D’Amaro, and Dana Walden. However, finding someone who can step into Iger’s shoes and navigate the complexities of the company is a challenge. The board has now been given the green light to proceed with the search process.
Overall, Disney still has several hurdles to overcome in order to satisfy shareholders and maintain its position as an entertainment giant. The company needs to demonstrate a coherent strategy, turn its streaming services into profitable units, revive its box-office performance, and find a suitable successor for CEO Bob Iger. Failure to address these challenges may result in further activist campaigns and demands for change in the future. It remains to be seen whether Disney can successfully navigate these obstacles and secure its position in the industry.
