Disney may license more movies and TV shows to streaming competitors as it becomes less focused on producing original content for its own streaming platforms, CEO Bob Iger said Thursday.
Speaking at the Morgan Stanley Technology, Media and Telecommunications Conference in San Francisco, Iger said he was “very bullish” on streaming, but acknowledged that the company needs to rethink some of its strategies when it comes to its own Disney+ streaming platform.
“As we try to reduce content created for our own platform, there may be opportunities to license it to third parties,” he said, noting that this was not a possibility “for a long time” because Disney chose him. its own streaming platform.
“But if we get to the point where we need less content for the platform, and we still have the ability to produce that content, why not use it to increase revenue?” Iger thought. “That’s what we’re going to do.”
However, he confirmed that content created by Disney’s core brands — like Disney, Pixar and Marvel — will remain “in house.”
During Iger’s first 15 years as Disney’s chief executive, the entertainment giant made big bets on content, buying Pixar, Marvel, Lucasfilm and 21st Century Fox, and launching the company’s flagship streaming service Disney+.
While Disney licensed some of its titles to other streaming platforms, it limited the amount of content available to its competitors with the launch of Disney+ in 2019.
However, Iger suggested Thursday that some of the content under the umbrella of Disney brands and titles could be used as revenue generators by allowing the company’s competitors to gain more access to licensing rights.
“It has been clear to us that the exclusivity that we thought would be valuable for us in many subscriptions, while it has some value, it is not as valuable as we thought,” he said.
Iger used Disney’s adult animation portfolio as an example of content that could be licensed to third parties, as he had acquired several cartoon series like “Bob’s Burgers” and “Family Guy” when he bought 21st Century Fox.
He told the Morgan Stanley conference that the billions of hours of content consumed on Hulu are “remarkable.”
“It shows that there’s an opportunity to license that content to other people, because ‘The Simpsons’ is over,” he said. “It’s one of the most popular programs on Disney +, but it’s already on the Fox network. You can still do it [license content] which is great in terms of streaming, but we make more money with a balanced model of licensing for third parties and streaming for ourselves.
Iger, who returned to the helm of the entertainment giant in November after just 11 months away from the company, told employees upon his return that profitability would be a top priority for Disney’s streaming business.
The week before, streaming Disney reported a quarterly loss of $1.5 billion — more than double its loss from a year earlier.
Under his successor (and predecessor) Bob Chapek, Disney invested billions into its streaming platform, drastically increasing spending on original content as part of its growth strategy. That strategy has helped the company build a subscriber base to rival Netflix, but Disney warned when it released fourth-quarter earnings that streaming growth could fade quickly, and streaming losses have been on shareholders’ radars for the past year.
Last month, Disney reported its first Disney+ subscriber loss since the platform was launched, dropping 2.4 million subscribers in the last three months of 2022.
Iger said Thursday that Disney is “dead set” with its Disney+ pricing plan because of its “eagerness to grow global subscriptions.”
Late last year, Disney launched a cheaper, ad-supported Disney+ subscription option in the US to increase subscriber numbers and revenue through advertising.
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