Disney CEO Bob Iger admits: “We have a lot of content that isn’t boosting subscriptions.”

Disney+ Strategy Not Driving Sub Growth, Admits CEO Bob Iger

The Walt Disney Company CEO Bob Iger confirmed that some of the content created for Disney+ was not driving subscription growth for the streaming platform. During The Walt Disney Company’s Q2 FY23 Earnings Results webcast, Iger stated, “As we grow the business in terms of the global footprint, we realized that we made a lot of content that is not necessarily driving sub growth and we’re getting much more surgical about what it is we make.”

Reducing Content Spend and Focusing on Real Sub Drivers

Iger revealed that many of the pieces of content they created were negatively impacting the company’s bottom line due to their marketing costs outweighing the subscription revenue. He explained, “And one interesting example — I should throw marketing in too — where when you make a lot of content everything needs to be marketed. You’re spending a lot of money marketing things that are not going to have an impact on the bottom except negatively due to the marketing costs.”

Iger then went on to admit there was a number of pieces of programming that were not driving any subscriptions whatsoever, “As witnessed by the ones that are coming up including Avatar, Little Mermaid, Guardians of the Galaxy, Indiana Jones, Elemental, etc…, where we actually believe we have an opportunity to lean into those more, put the right marketing dollars against it, allocate more away from programming that was not driving any subs at all.”

New Strategy: Quality Over Quantity

The new strategy the company plans to employ is to produce lower volumes of content in alignment with a strategic shift towards quality over quantity. The Walt Disney Company’s Senior Executive Vice President and Chief Financial Officer Christine McCarthy detailed it earlier in the Earnings Results webcast. She said, “We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation that you’ve heard Bob discuss. As a result we will be removing certain content from our streaming platform and currently expect to take an impairment charge of approximately $1.5 to $1.8 billion.”

What do you make of Bob Iger admitting his Disney+ strategy was negatively effecting the bottom line? Do you think he can turn it around with a focus on less content and quality?

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