Start-up investment mentality, loss leader strategy, these are all perfectly legitimate business positions for a company entering a new market to take. However, what is unusual is to hear a business leader be so blunt about challenges in this space. Not Disney CEO Bob Iger. He just came right out and said it.
Usually, you would expect some financial waffle about expected losses, building critical mass, and promising sunlit uplands without looking like you are abandoning a strategy, all the while actually abandoning a strategy.
According to a report in The Hollywood Reporter, Iger turned up at MoffettNathanson Media, Internet & Communications Conference and was blunt about some of Disney’s challenges recently.
He put a number on Disney+ – a $4 billion loss. He put it down to investment in content, but a little too much and too fast:
“As we got into the streaming business in a very, very aggressive way, we tried to tell too many stories. Basically, we invested too much, way ahead of possible returns. It’s what led to streaming ending up as a $4 billion loss.”
He specifically pointed at “volume and not quality, which turned out to be a mistake”.
I get where he is coming from, but Disney+ did kick the door down and march into an existing market like it owned the place, driving subscribers up to 164.2 million in a pretty short window.
How many of those people would be subscribing simply for access to the historical Disney library? In my opinion, love them or loathe them, the expensive Star Wars and Marvel shows were a prime driver in this explosive subscriber growth. They were the “Killer App” at the start, not re-runs of Mickey’s Playhouse.
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