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Tag: Bob Chapek

  • Bob Iger Has No Plans to Lift Disney Hiring Freeze

    Bob Iger Has No Plans to Lift Disney Hiring Freeze

    Bob Iger’s return as CEO of Disney may signal a time of change, but the company’s hiring freeze is one thing that won’t change.

    Disney stunned the industry when it announced last week that Bob Chapek would be replaced by his predecessor, former CEO Bob Iger. Chapek had increasingly lost the confidence of investors, as well as Iger, and the company hopes Iger will be able to help it return to greater profitability.

    Whatever changes Iger may have in store for Disney, hiring is not one of them, according to CNBC. At a meeting with company employees, Iger emphasized the need for the company’s streaming services to become profitable, rather than simply add subscribers.

    When the questions turned to the company’s hiring freeze, Iger indicated there were no plans to reverse it for the time being.

  • Bob Chapek Is Out and Bob Iger Is Back In As Disney CEO

    Bob Chapek Is Out and Bob Iger Is Back In As Disney CEO

    Disney made waves late Sunday, announcing the ouster of CEO Bob Chapek and the return of Bob Iger in the role for two years.

    Chapek replaced Iger as Disney CEO when the latter retired, but Disney has faced multiple headwinds impacting its profitability. In the midst of increasing doubt in his leadership, the company decided to go with Iger, calling him out of retirement for a two-year contract.

    One of Iger’s main mandates will be to lower cost and improve profitability, both of which have become big issues in recent quarters. Disney+, in particular, has been a big drain on the company’s financial results, accounting for $1.5 billion in losses in the most recent quarter. That was up from $0.8 billion the previous quarter.

    Iger’s mandate will also include finding and grooming a suitable replacement for him, one that will carry on once his two-year term is up.

    Below is a full copy of Iger’s email to employees, obtained by CNBC.

    Dear Fellow Employees and Cast Members,

    It is with an incredible sense of gratitude and humility—and, I must admit, a bit of amazement—that I write to you this evening with the news that I am returning to The Walt Disney Company as Chief Executive Officer.

    When I look at the creative success of our teams across our Studios, Disney General Entertainment, ESPN and International, the rapid growth of our streaming services, the phenomenal reimagining and rebound of our Parks, the continued great work of ABC News, and so many other achievements across our businesses, I am in awe of your accomplishments and I am excited to embark with you on many new endeavors.

    I know this company has asked so much of you during the past three years, and these times certainly remain quite challenging, but as you have heard me say before, I am an optimist, and if I learned one thing from my years at Disney, it is that even in the face of uncertainty—perhaps especially in the face of uncertainty—our employees and Cast Members achieve the impossible.

    *You will be hearing more from me and your leaders tomorrow and in the weeks ahead. In the meantime, allow me to express my deep gratitude for all that you do. Disney holds a special place in the hearts of people around the globe thanks to you, and your dedication to this company and its mission to bring joy to people through great storytelling is an inspiration to me every single day. *

    Bob Iger

  • Disney Accelerating Pivot To DTC-First Business Model

    Disney Accelerating Pivot To DTC-First Business Model

    During yesterday’s earnings call Disney CEO Bob Chapek said it has accelerated the company’s pivot towards a DTC-first business model. “Our recent strategic reorganization has enabled us to accelerate the company’s pivot, towards a DTC-first business model and further grow our streaming services,” says Chapek. “Disney+ has exceeded even our highest expectations, in just over a year since its launch with 94.9 million subscribers. ESPN+ and Hulu have also performed well, with 12.1 million and 39.4 million subscriptions, respectively.”

    Chapek attributes the company’s massive streaming growth to its huge collection of brands. “The wealth of IP from our unrivaled collection of brands and franchises provides us with an incredible breadth and depth of storylines and characters to mine for Disney+ and our other streaming services,” says Chapek. “We have the ability to interconnect these storylines and characters in unprecedented ways as we saw with The Mandalorian and WandaVision tying into the broader Star Wars and Marvel franchises. We’re excited to continue exploring the endless possibilities that this unique ecosystem provides.”

    DTC Results Improved By $650 Million

    “We believe that we’ve got a great price-value relationship,” says Chapek. “I think the best insulation we’ve got (to lower churn) is to keep the price-value relationship very high and there’s no better way to do it than powerhouse franchises cranking out regular new releases on a monthly basis.”

    Disney’s direct-to-consumer results have improved by nearly $650 million versus the prior year. “Last quarter, we guided to direct-to-consumer operating income declining by $100 million versus the prior year under our former segment structure,” says Disney CFO Christine McCarthy. “Our reported results are $750 million higher than that guidance.”

    Lower Disney Losses Attributed To Disney+

    Disney attributes their lower losses to the growth of the Disney+ streaming service. “A lower loss in the first quarter compared to the prior year was driven by subscriber growth partially offset by higher costs due to the launch and expansion of Disney+. With 94.9 million paid subscribers at the end of Q1, Disney+’s global net additions were 21.2 million versus Q4.”

    “Disney+ Hotstar subscriber additions continued their strong growth trend with Disney+ Hotstar subscribers making up approximately 30% of our global subscriber base,” said McCarthy. “We also saw strong additions to our subscriber base from our November launch in Latin America.”

    Disney Happy With Level Of Churn

    Disney is also very happy with its level of churn especially as it relates to subscribers who came into the Disney+ service via their Verizon partnership which helped power its launch last year. “We are very pleased with what we’ve seen so far on the level of churn,” said McCarthy. “And as our product offering matures and we put more content into the service and our subscriber base becomes more tenured, we expect to see our churn rates continue to decline.

    So in regard to the specific churn related to the anniversary of the Verizon launch promotion from last November 2020, we’re really happy with the conversion numbers that we have seen there going from the promotion to become paid subscribers.”

    100 New Titles a Year

    “With Disney+ originals along with the theatrical releases and the library titles, we’ll be adding something new to the service every week,” noted McCarthy. “We are very pleased with the engagement overall. We believe we’re going to reach that cadence of getting content on the service every week within the next few years. We’ve also set that target for 100-plus new titles per year. And that’s across Disney Animation, Disney Live Action, Pixar, Marvel, Star Wars, Nat Geo. And of course, we’ll continue to add more to our library as we go through time as well.”

    “Given the value of growing our sub base, we are continuing to invest in high-quality content,” says McCarthy. “We believe that content is the single biggest driver to not only acquiring subs, but retaining them.”

  • Disney: Less Theaters, More DTC

    Disney: Less Theaters, More DTC

    “We’ve benefited from a tremendous relationship with theatrical exhibition for many years,” says Disney CEO Bob Chapek. “However, there are a lot of consumers that want to experience a movie in the safety, comfort, and convenience of their own home. We want to accelerate our transition to a real direct-to-consumer priority company. Ultimately, the consumer is going to be making the decision in terms of how they consume our media as opposed to some arbitrary decision that we may make from a distribution standpoint.”

    Bob Chapek, CEO of Disney, discusses how Disney is transitioning to a direct-to-consumer company with less focus on the theatrical distribution of video content:

    Accelerating Transition To Direct-To-Consumer Company

    We want to accelerate our transition to a real direct-to-consumer priority company. We’ve got the opportunity to build upon the success of Disney+ which by almost any measure has been far and above anybody’s expectations. We really want to use this to catalyze our growth and increase shareholder wealth. In every territory and every platform, our expectations with Disney+ have been exceeded and exceeded every month. We’re thrilled with the way it’s going. We just think that this reorganization is going to catalyze growth even further.

    I would not characterize (our reorganization) as a response to COVID but COVID accelerated the rate at which we made this transition. This transition was going to happen anyway. Essentially, what we want to do is separate out the folks who make our wonderful content based on tremendous franchises from the decision making in terms of where the prioritization is and how it gets commercialized into the marketplace.

    We want to leave it to a group of folks who can really see objectively across all the constituents that we have and the various different considerations that we’ve got and make the optimal decision for the company. This is as opposed to somehow having it be predetermined that a movie is destined for theaters or that a TV show is destined for ABC. So really what we want to do is provide some level of objectivity and really make it a decision that benefits the overall company and its shareholders.

    We’re Putting The Consumer First

    What it says is that we’re putting the consumer first. The consumer is actually going to be who’s going to make this decision. They’re going to lead us with how they make their transactional decisions. Right now, they’re voting with their pocketbooks and they’re voting very heavily towards Disney+. We want to make sure that we’re going the way that the consumers want us to go.

    Certainly, COVID has impacted all of our traditional distribution businesses. But this is even more than reactionary, this is really progressive. This is looking out with a vision towards where we see the world going and how we see that consumers are interacting with Disney+, ESPN+, and Hulu and where it’s going to go in the future in our international business with Star. We’re trying to as they say skate to where the puck is going to be.

    Less Theaters, More DTC

    We’ve benefited from a tremendous relationship with theatrical exhibition for many years. As dynamics change in the marketplace though we want to make sure that we’re giving consumers who want to go to theaters, to experience everything that a theatrical release can give them, we want to make sure that we continue to give them that option.

    At the same time, there are a lot of consumers that want to experience a movie in the safety, comfort, and convenience of their own home for whatever reasons they do. We want to make sure that we put the consumer first. Ultimately, the consumer is going to be making the decision in terms of how they consume our media as opposed to some arbitrary decision that we may make from a distribution standpoint. We want to look at ourselves as consumer enablers.

    Disney: Less Theaters, More DTC

  • Bob Chapek Replaces Bob Iger As Walt Disney CEO

    Bob Chapek Replaces Bob Iger As Walt Disney CEO

    Closing out one of the most successful runs as CEO, Bob Iger is stepping down and being replaced by Bob Chapek as head of Walt Disney.

    Iger has been CEO of Walt Disney for 14 years, and helped the company grow to one of the biggest entertainment powerhouses in the world. Under his leadership, Disney purchased Pixar, Marvel Entertainment and Lucasfilm, bringing some of the most beloved franchises and entertainment properties under Disney’s umbrella. More recently, the company unveiled its own streaming service, which has already been a hit with consumers.

    “With the successful launch of Disney’s direct-to-consumer businesses and the integration of Twenty-First Century Fox well underway, I believe this is the optimal time to transition to a new CEO,” Mr. Iger said. “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the Company’s creative endeavors.”

    Mr. Iger continued: “Bob will be the seventh CEO in Disney’s nearly 100-year history, and he has proven himself exceptionally qualified to lead the Company into its next century. Throughout his career, Bob has led with integrity and conviction, always respecting Disney’s rich legacy while at the same time taking smart, innovative risks for the future. His success over the past 27 years reflects his visionary leadership and the strong business growth and stellar results he has consistently achieved in his roles at Parks, Consumer Products and the Studio. Under Bob’s leadership as CEO, our portfolio of great businesses and our amazing and talented people will continue to serve the Company and its shareholders well for years to come.”

    To help ensure a smooth transition, Iger will take on the role of Executive Chairman and lead the company’s Board, as well as creative endeavors, till the end of 2021.