News Bob Iger is back! Chapek is out!!

[NotCalledBob]

Iger and D’amaro are in Epcot today


Probably just picking up a figment popcorn bucket once they get around all the construction walls

And riding Cosmic Rewind. Over, and over, and over, and over. And also, over.

Until they get September.

Can Bob override the algorithm??

 

[Jrb1979]

No, I think costs got out of control when Chapek announced a new goal for total number of subscribers (he raised the goal from 80M-90M to 240M+) and the pandemic pushed them to release big movies on D+, which started to blur the difference between “streaming content” and “theatrical films.”

Nevertheless, big “losses” (they aren’t really losses because they feed the streaming machine and gain/retain subscribers) was always part of the plan.

When they did release big movies on D+ they did charge extra for them when they first released them. I still think they should have kept that model.

 

[_caleb]

I'll jump in. First, I'll say the pivot to streaming isn't wrong, I just think the execution was. So, first, I think they cast way too large a net. They went all in on original shows for just D+, but also went all in on bulk content (see the Fox purchase). I think they needed to pick one as a main.

On top of that, I think they are spending WAY too much on new content when it's not overly needed. Do they have 125 million subscribers now without the what, 10 or 11 Marvel shows? Maybe not. But do they have 100 million if they only did a fraction of them? I think so. Star wars is tough for me to read because they had such a disaster in the theaters, so they were almost forced here. BUT, some of the most beloved Star Wars stuff is the cartoon style (Clone Wars, Bad batch, etc.). That stuff I'm assuming is a TON cheaper to create than the CGI-loaded shows. And the same may be true for Marvel. Maybe things that have seemed more one-offs as opposed to working towards cannon could be just animated like What if, and the rest they continued the path of introducing characters in movies, where it's easier to make up those large budgets.

Disney also thrives on the nostalgia. So I think a few shows along with the streaming rights to major movies AFTER their theater runs, and all their old content would be enough. They are now in a tough spot because it's going to be tough to just shelf ALL those shows already announced without some major blowback, and I don't think they can get their targets without shelfing a bunch.

Thanks for sharing your ideas.

I think what you outline here was more in line with what many investors thought Disney should do. Iger addressed this when he was hyping the launch of Disney+. At the time, Netflix was king, and every other studio was launching a “+” streaming platform. Most of those were positioning themselves as lower-priced add-ons (AMC+, Discovery+, etc.) and Disney did not want to go this route because there wasn’t as much money in it.

So they bought and spent their way into a position of huge subscriber numbers, lower-than-average churn rate, and relatively high ARPU. We can speculate how much they over-spent for these, but only in hindsight. Nobody knew (or knows now) how much it costs to acquire or retain subscribers.

You’ll probably be pleased to know that Disney is putting the brakes on spending to try to test how little they can spend until it has a measurable effect on subscriptions.

 

[Disney Analyst]

Okay where do I sign up? At that pay Disney fans can crucify me online all they want.

 

[flynnibus]

I'll jump in. First, I'll say the pivot to streaming isn't wrong, I just think the execution was. So, first, I think they cast way too large a net. They went all in on original shows for just D+, but also went all in on bulk content (see the Fox purchase). I think they needed to pick one as a main.

On top of that, I think they are spending WAY too much on new content when it's not overly needed.

I think they were going for a death punch. The idea they have to have a decisive victory, not just slow healthy growth. It seems a streaming platform needs to have a critical mass to stay relevant and at least right now, needs to stay 'hot' to not immediately start shrinking. The market is not stable where people keep a baseline whitebread provider they keep as a comfort blanket. It's still very much 'hot' and 'not'. Providers that only speak to a niche are getting overran by DTC providers trying to be bigger and bigger.

So instead of happily attracting a 'Disney focused' fan base... they were going for 'how to be *THE* premier streaming platform' and speak to all the audience, everywhere, be the hotness, and do it all on a very accelerated timeline. That is expensive and takes big moves.

Are they right? I think the market will be very volatile as long as everyone allows a cheap month-to-month option. I think providers will have to start moving towards trying to lock people in for longer periods to make this all work. (Imagine annual contracts that give decent per/mon costs and monthly offers becoming harder to get).

 

[UNCgolf]

Nevertheless, big “losses” (they aren’t really losses because they feed the streaming machine and gain/retain subscribers) was always part of the plan.

I'm interested to see how this plays out.

Gaining subscribers doesn't really mean anything if most of them cancel once you raise prices. There's also the problem that people can subscribe for one month to watch whatever interested them then cancel again.

While that hasn't been a big concern up to this point, I think as streaming prices rise people will pay more attention to what they're actually subscribed to.

 

[Disney Analyst]

I think they were going for a death punch. The idea they have to have a decisive victory, not just slow healthy growth. It seems a streaming platform needs to have a critical mass to stay relevant and at least right now, needs to stay 'hot' to not immediately start shrinking. The market is not stable where people keep a baseline whitebread provider they keep as a comfort blanket. It's still very much 'hot' and 'not'. Providers that only speak to a niche are getting overran by DTC providers trying to be bigger and bigger.

So instead of happily attracting a 'Disney focused' fan base... they were going for 'how to be *THE* premier streaming platform' and speak to all the audience, everywhere, be the hotness, and do it all on a very accelerated timeline. That is expensive and takes big moves.

Are they right? I think the market will be very volatile as long as everyone allows a cheap month-to-month option. I think providers will have to start moving towards trying to lock people in for longer periods to make this all work. (Imagine annual contracts that give decent per/mon costs and monthly offers becoming harder to get).

Maybe because I know I’ll use Disney+ for sure every month, but we’ve always paid annual. It’s cheaper in the long run.

 

[Sirwalterraleigh]

But Disney has made the pivot to streaming incrementally over the course of sixteen years!

• 2006 Disney first to add movies to iTunes- feature-length films were $14.99 for new releases and $9.99 for older content
• They then moved into rentals through iTunes in 2008, with new releases priced at $3.99 and library titles at $2.99
• In April of 2009, Disney bought a stake in Hulu and started offering a limited selection of ad-supported films
• In December of 2012, Disney signed a deal with Netflix to put films on that platform
• In 2013, Disney allowed consumers to download digital copies of films bought on DVDs with Disney's "Digital Copy Plus"
• In 2014, Disney launched "Disney Movies Anywhere," a web-based cloud access to purchased movies
• In 2015, Hulu (majority owned by Disney) added a subscription model: $11.99/mo. ad-free, $7.99/mo. w/ads
• In 2016, Disney bought into BAMTech, which they then bought out and then turned into Disney Streaming
• In 2017, Iger announced that Disney would be pulling its content from Netflix
• Disney+ launched in Nov. 2019, at $6.99/mo.
• Disney raises subscription price of D+ to $10.99/mo and added a w/ads tier for $7.99

It's been a long, slow process. We could annotate each of the above steps with lessons learned. They've looked at consumer behavior, market prices, technology, content strategies, marketing, etc. The last step in their plan is to reduce costs and raise revenues to get to profitability.

None of that was a move to streaming.

They didn’t want to scare away ads…so they did all that stuff to not offend…and see if anyone would pay for “the brand”?

…they didn’t.

 

[_caleb]

When they did release big movies on D+ they did charge extra for them when they first released them. I still think they should have kept that model.

Yeah, I’ve seen others mention that here. I think I payed for Premier Access for the live-action Mulan and maybe Jungle Cruise. There may be a way to continue to leverage that approach, but it faces the same challenges streaming poses to theatrical releases; since people are already subscribed and there’s more than enough to watch on the platform, they’re content to just wait until a movies is available without the extra fees.

 

[_caleb]

And riding Cosmic Rewind. Over, and over, and over, and over. And also, over.

Until they get September.

Can Bob override the algorithm??

What algorithm?

 

[Sirwalterraleigh]

No, I think costs got out of control when Chapek announced a new goal for total number of subscribers (he raised the goal from 80M-90M to 240M+) and the pandemic pushed them to release big movies on D+, which started to blur the difference between “streaming content” and “theatrical films.”

Nevertheless, big “losses” (they aren’t really losses because they feed the streaming machine and gain/retain subscribers) was always part of the plan.

Investors are greedy…but they’re not stupid.

You really seem to buy that Iger and his really…really low talent execs over the last 6 years are smart and every institutional investor is really dumb.

If you can definitely show that D+ is gonna make a ton of free and clear profits - which is what they have promised - then you would be the first and only one with evidence.

You’re too smart to hang out here with us

 

[Sirwalterraleigh]

And riding Cosmic Rewind. Over, and over, and over, and over. And also, over.

Until they get September.

Can Bob override the algorithm??

If they didn’t specifically demand TFF…then they should be fired.

But what a sad show those tours are. They still can’t get enough workers, they’re back for nickel and diming them…and in 6 Months they’re go from mandatory 48 hours to mandatory 32 and grey clouds over Orlando.

 

[Sirwalterraleigh]

Iger puts McCarthy in charge of the ad hoc committee of reorganization and wants her gone at the same time? The one who threatened to quit unless Chapek was gone?

Doesn't seem likely. I'll put this in the same bin with Kennedy being fired.

You mean the person who got ahead of Iger and leaked her own extension to the Hollywood press…that Disney still never acknowledged? To this day…
She’ll be retired soon too. Good for her…she played the Hollywood game to its end.

Disneys management and board are really bad…I know this is culture shock. But it’s still true. The fact that some nyc sh!tang had to point it out…doesn’t make it less true

 

[_caleb]

None of that was a move to streaming.

They didn’t want to scare away ads…so they did all that stuff to not offend…and see if anyone would pay for “the brand”?

…they didn’t.

Of course it was. Incrementally, Disney has been changing its business from making movies to release in theaters and then on VOD and then on DVD and then on Disney Channel/ABC to making content to release directly to consumers. And of course they did this incrementally— as not to “scare off ads,” which was (and will be again) revenue.

Investors are greedy…but they’re not stupid.

You really seem to buy that Iger and his really…really low talent execs over the last 6 years are smart and every institutional investor is really dumb.

You think investors (like Peltz) and fans like us understand the tech, market, production, costs, and management behind streaming better than Disney’s team who live it every day and have access to data we’ll never have? I don’t. And it’s in Disney’s interest not to share all they know, so we’re relying on Disney-approved talking points and third-party research (and speculation).

If you can definitely show that D+ is gonna make a ton of free and clear profits - which is what they have promised - then you would be the first and only one with evidence.

You’re too smart to hang out here with us

I definitely never claimed to be smart! I enjoy the conversation from the cheap seats.

I cannot prove that D+ is going to replace and surpass the old linear/box office model in revenue. But I do see the potential in DtC (particularly in the data they collect), I think Disney was smart to recognize that the landscape is changing, and I’m pleased that they’re making big and bold moves to try to get ahead of that change. It’s fun to watch when the stakes are high like this.

 

[LSLS]

Thanks for sharing your ideas.

I think what you outline here was more in line with what many investors thought Disney should do. Iger addressed this when he was hyping the launch of Disney+. At the time, Netflix was king, and every other studio was launching a “+” streaming platform. Most of those were positioning themselves as lower-priced add-ons (AMC+, Discovery+, etc.) and Disney did not want to go this route because there wasn’t as much money in it.

So they bought and spent their way into a position of huge subscriber numbers, lower-than-average churn rate, and relatively high ARPU. We can speculate how much they over-spent for these, but only in hindsight. Nobody knew (or knows now) how much it costs to acquire or retain subscribers.

You’ll probably be pleased to know that Disney is putting the brakes on spending to try to test how little they can spend until it has a measurable effect on subscriptions.

As a Marvel fan, no, not at all. I fully believe they have all the plans laid out for bringing everything together, and pushing things all around can't help that in the least, which is why I mentioned that I think it's difficult to change things right now. But I do think in the beginning, it's how they should have planned things. Anecdotally, we don't subscribe to anything outside of Netflix for the original content (and Netflix is a subscribe a month a year or so). It's for the historic stuff (D+ included). We enjoy the new stuff from D+ and others, but that's not a deal breaker. Pricing potentially could be (no matter the original content).

But, to go back a ways to my humor with Iger as the savior, the majority of these were announced while he was in charge. So what happened that ballooned things so much to the point investors question if it can ever hit a profit? Were his calculations wrong? Was the plan for the Marvel shows to come out over 7 years instead of 3? Was it the few additional seasons of shows that sent it over (unlikely)? Were these shows all announced and no budget ever figured out? All of the above? And why is the man who did it the one who can fix it?

One thing I believe now more than ever, Chapek's firing was not because of this (even if it's the excuse used).

 

[Sirwalterraleigh]

That's not how it works. Projections are just that, an educated guess. They would never get in trouble from the SEC for that.

…we have a REAL learning problem with what you’re saying around here…

The idea that a name tag is the equivalent of truth serum. The SEC does not make Disney - or any company - “tell the truth”. JP Morgan paid a $2 billion dollar fine for systematically lying to their customer for years…and their stock went up. So a missed projection on a completely unproven product is gonna cause a raid by the Feds and walks of shame?

It’s beyond foolhardy to think you can bank D+ prospects because Slaphead mentioned them for 15 seconds.

The world is flat around here…or more accurately “I’m a big Disney fan…they don’t lie to me…they’re never wrong because I like magic kingdom…nothing bad in my parks…welcome home”

 

[GhostHost1000]

…we have a REAL learning problem with what you’re saying around here…

The idea that a name tag is the equivalent of truth serum. The SEC does not make Disney - or any company - “tell the truth”. JP Morgan paid a $2 billion dollar fine for systematically lying to their customer for years…and their stock went up. So a missed projection on a completely unproven product is gonna cause a raid by the Feds and walks of shame?

It’s beyond foolhardy to think you can bank D+ prospects because Slaphead mentioned them for 15 seconds.

The world is flat around here…or more accurately “I’m a big Disney fan…they don’t lie to me…they’re never wrong because I like magic kingdom…nothing bad in my parks…welcome home”

Ah it’s nothing a free dumbo annual passholder magnet (for those who still have an annual pass) won’t solve

…or the next celebration cupcake

 

[Sirwalterraleigh]

Ok…I’ll play

Of course it was. Incrementally, Disney has been changing its business from making movies to release in theaters and then on VOD and then on DVD and then on Disney Channel/ABC to making content to release directly to consumers. And of course they did this incrementally— as not to “scare off ads,” which was (and will be again) revenue.

No it wasn’t…it was a guy who’s experience was 101% in broadcast and cable “tinkering “ with it. I don’t even disagree with it…but please read iger’s bio and make the next mental jump.

You think investors (like Peltz) and fans like us understand the tech, market, production, costs, and management behind streaming better than Disney’s team who live it every day and have access to data we’ll never have? I don’t. And it’s in Disney’s interest not to share all they know, so we’re relying on Disney-approved talking points and third-party research (and speculation).

Disney has been NOTORIOUSLY bad at tech over the years. So where’s this genius insight you assume to be true. Bob had to borrow $1.3 billion to install wifi in Orlando under false pretenses. They used a dos based management system till 2005.
You don’t spell Disney “apple” or “Microsoft”. Stay in the lanes here, you’re gonna ruin my 7-10 spilt pickup

I definitely never claimed to be smart! I enjoy the conversation from the cheap seats.

I cannot prove that D+ is going to replace and surpass the old linear/box office model in revenue. But I do see the potential in DtC (particularly in the data they collect), I think Disney was smart to recognize that the landscape is changing, and I’m pleased that they’re making big and bold moves to try to get ahead of that change. It’s fun to watch when the stakes are high like this.

Ok.

Here’s where we koombayaa

They…and you may be completely right…and it’s good for stockholders…and I have a chunk (full disclosure)…

But Wall Street is basically calling bull on the idea they’re gonna rake on stream. And that is as close to the “unbiased side” that we have right now.
It hasn’t happened anywhere. Netflix is as much bad as its good.
Does Disney stand a better chance? Sure…they do.
But they’re screwing their IP too…and smart people are getting wise to that too.

They are off the rails…but can find away to still hold it…
Iger has to go. That die is cast.

 

[Jrb1979]

Of course it was. Incrementally, Disney has been changing its business from making movies to release in theaters and then on VOD and then on DVD and then on Disney Channel/ABC to making content to release directly to consumers. And of course they did this incrementally— as not to “scare off ads,” which was (and will be again) revenue.

You think investors (like Peltz) and fans like us understand the tech, market, production, costs, and management behind streaming better than Disney’s team who live it every day and have access to data we’ll never have? I don’t. And it’s in Disney’s interest not to share all they know, so we’re relying on Disney-approved talking points and third-party research (and speculation).

I definitely never claimed to be smart! I enjoy the conversation from the cheap seats.

I cannot prove that D+ is going to replace and surpass the old linear/box office model in revenue. But I do see the potential in DtC (particularly in the data they collect), I think Disney was smart to recognize that the landscape is changing, and I’m pleased that they’re making big and bold moves to try to get ahead of that change. It’s fun to watch when the stakes are high like this.

Bolded is the biggest issue I see with streaming for all companies. I don't dispute that streaming will be the future. I just don't see how it will ever be as big revenue generator like cable and box office was. IMO there is only 2 ways this can ever make money. Either they cheapen out on the cost for new content or raise prices to cover the content they are making.

I don't see how either one ends well. I'm not just talking Disney, this goes for all the streaming companies.

 

[Jrb1979]

Maybe because I know I’ll use Disney+ for sure every month, but we’ve always paid annual. It’s cheaper in the long run.

People like ones on these boards aren't your average person. I would wager your average person subscribes for a month or two to binge the show they want then unsubscribe. They most likely do that for all the streaming services.