Investing

Iger Helped Ruin Disney

Subscriptions to Disney+ were priced at $6.99 per month. Iger gambled that he could get market share at the cost of profits. Most of Disney’s streaming competition was priced between $10 and $15 monthly. Disney botched the chance to increase to those levels without driving churn up, and subscriber counts down. Its chance to make money was trapped by its low price point.

 

Iger did not take advantage of the depth and breadth of Disney’s content. He paid billions of dollars for Pixar, Star Wars, and Marvel. When he had his chance, he failed to capitalize on these investments. He also did not take advantage of the instincts that led him to buy all of those franchises. 

It was Iger who painted streaming as a critical business. When it was first available, he said, “It’s going to be the most important product our company has launched in a long time, certainly in my tenure.” Its chances of making large sums of money were stillborn. 

As Iger returns, he won’t have the magic to make Disney+ a contributor to earnings. He will have to sharply cut costs in the division in an attempt to change that. And those cysts will make it less attractive to subscribers in a period when the streaming competition has surged. 

Iger will turn out to be a poor choice.

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