Wednesday, December 7, 2005
Disney CEO recasts role
Company embraces new technology with Apple deal, which Iger says has sparked more consumer-based thinking and selectivity among financial endeavors.
By MERISSA MARR
The Wall Street Journal
For many years, Robert Iger played the dutiful deputy to Walt Disney Co.'s larger-than-life chief executive officer, Michael Eisner. Now, having ascended to the CEO post himself, Iger has been making his own mark on the 82-year-old media giant.
Sixty days into the job, the former ABC executive has made headlines with a groundbreaking deal to sell television shows including "Desperate Housewives" and "Lost" to play on Apple Computer's new video iPod.
So far, the 54-year-old Iger has succeeded in quieting critics who questioned his path to the top. When Eisner earmarked Iger as his successor last year, there were howls of protest from doubters who griped that Disney should be casting its net more widely. A grueling race ensued.
His success in the role ultimately will be judged on his ability to tackle a number of key issues. They include setting Disney on a path for long-term growth against the backdrop of a fast-evolving digital landscape, overturning the company's trapdoor culture and firing up its creative engines.
In a discussion with The Wall Street Journal, Iger talked about his approach to his new role and the challenges he faces. Excerpts:
WSJ: You smashed the glass with the deal to sell episodes of "Desperate Housewives" and "Lost" for $1.99 on the new video iPod. What were the most important achievements of that agreement?
Iger: First, we'll learn more about consumer behavior and using new technology in a new window with different pricing. Secondly, I really wanted to use it as a catalyst to get the company thinking more about breaking with tradition and following the consumer. Interestingly enough, nothing has done more to reignite the company than this deal. It almost has created more value for the company than the deal itself.
WSJ: How have your troops responded?
Iger: I think the troops love the fact that we were first. It's had a great impact on the company's spirit. The feeling is tangible; whether that translates into behavior change is a little too early to tell, except that I do sense that there is a lot of exploration going on at all of our businesses. The other thing that's good is that the company seems to have learned very quickly that it shouldn't be about just making a deal, it has to be the right deal. We've been besieged with other opportunities but instead of just getting in line and just checking off 25 other deals, we're actually being very selective.
WSJ: What happens to the advertising revenue model?
Iger: The argument to advertisers is that people who are watching the shows on this screen are people who would not have watched them on television to begin with. So they're not really losing consumption. Committed viewers to the most popular shows only watch about half of the episodes that are available over a given season. So if you can give these people an opportunity to catch up, you're providing them a service and they probably would pay for it.
WSJ: You've previously suggested that the gap should be narrowed between a movie's theatrical release and its availability on DVD. Can you unilaterally change the DVD window?
Iger: We'd be better off as a company and an industry if we compressed that window. We could spend less money pushing the box office and get to the next window sooner where a movie has more perceived value to the consumer because it's more fresh. The problem is the theater owners threaten that if you do that, then you're not going to run your film on as many screens.
WSJ: What are your plans for the theme parks? Are you planning to expand the existing parks?
Iger: We're not currently planning that. There will be more parks built around the world. I can't say exactly where, although we've said publicly we've been in discussions about Shanghai for a long time. That will end up getting resolved fairly soon. There are three or four entities in the world, locations with money, that are looking for site-based entertainment, I'll call them theme parks, but they won't necessarily be along the same lines as parks we've built before. I would guess, not necessarily in the next few months, but in the next year to two years that we will commit to creating a new concept or some entity outside the U.S.
Disney CEO recasts role
Company embraces new technology with Apple deal, which Iger says has sparked more consumer-based thinking and selectivity among financial endeavors.
By MERISSA MARR
The Wall Street Journal
For many years, Robert Iger played the dutiful deputy to Walt Disney Co.'s larger-than-life chief executive officer, Michael Eisner. Now, having ascended to the CEO post himself, Iger has been making his own mark on the 82-year-old media giant.
Sixty days into the job, the former ABC executive has made headlines with a groundbreaking deal to sell television shows including "Desperate Housewives" and "Lost" to play on Apple Computer's new video iPod.
So far, the 54-year-old Iger has succeeded in quieting critics who questioned his path to the top. When Eisner earmarked Iger as his successor last year, there were howls of protest from doubters who griped that Disney should be casting its net more widely. A grueling race ensued.
His success in the role ultimately will be judged on his ability to tackle a number of key issues. They include setting Disney on a path for long-term growth against the backdrop of a fast-evolving digital landscape, overturning the company's trapdoor culture and firing up its creative engines.
In a discussion with The Wall Street Journal, Iger talked about his approach to his new role and the challenges he faces. Excerpts:
WSJ: You smashed the glass with the deal to sell episodes of "Desperate Housewives" and "Lost" for $1.99 on the new video iPod. What were the most important achievements of that agreement?
Iger: First, we'll learn more about consumer behavior and using new technology in a new window with different pricing. Secondly, I really wanted to use it as a catalyst to get the company thinking more about breaking with tradition and following the consumer. Interestingly enough, nothing has done more to reignite the company than this deal. It almost has created more value for the company than the deal itself.
WSJ: How have your troops responded?
Iger: I think the troops love the fact that we were first. It's had a great impact on the company's spirit. The feeling is tangible; whether that translates into behavior change is a little too early to tell, except that I do sense that there is a lot of exploration going on at all of our businesses. The other thing that's good is that the company seems to have learned very quickly that it shouldn't be about just making a deal, it has to be the right deal. We've been besieged with other opportunities but instead of just getting in line and just checking off 25 other deals, we're actually being very selective.
WSJ: What happens to the advertising revenue model?
Iger: The argument to advertisers is that people who are watching the shows on this screen are people who would not have watched them on television to begin with. So they're not really losing consumption. Committed viewers to the most popular shows only watch about half of the episodes that are available over a given season. So if you can give these people an opportunity to catch up, you're providing them a service and they probably would pay for it.
WSJ: You've previously suggested that the gap should be narrowed between a movie's theatrical release and its availability on DVD. Can you unilaterally change the DVD window?
Iger: We'd be better off as a company and an industry if we compressed that window. We could spend less money pushing the box office and get to the next window sooner where a movie has more perceived value to the consumer because it's more fresh. The problem is the theater owners threaten that if you do that, then you're not going to run your film on as many screens.
WSJ: What are your plans for the theme parks? Are you planning to expand the existing parks?
Iger: We're not currently planning that. There will be more parks built around the world. I can't say exactly where, although we've said publicly we've been in discussions about Shanghai for a long time. That will end up getting resolved fairly soon. There are three or four entities in the world, locations with money, that are looking for site-based entertainment, I'll call them theme parks, but they won't necessarily be along the same lines as parks we've built before. I would guess, not necessarily in the next few months, but in the next year to two years that we will commit to creating a new concept or some entity outside the U.S.