Beyond Iger: A Strategy for Disney Beyond 2021
The tenure of Bob Iger as the CEO of The Walt Disney Company has been eventful, to say the least. His ability to build bridges has led to massive acquisitions such as Pixar, Marvel, Lucasfilm, and more recently, 21st Century Fox. He led the launch of Disney+ and opened the first Disney resort in mainland China.
If the main detractors of your legacy are the consumers tweeting #ReleaseTheAbramsCut, then it’s fair to assume you’ve done alright. Disney has recovered in an incredible way from the tail-end of the Michael Eisner era, dominating the box office in 2019, bringing in $13 billion and owning the six top movies of the year.
The solidification of the brand in the eyes of the consumers, the acquisition of an extensive library of intellectual property, and the leveraging of tech assets to build a D2C superpower have all occurred under Iger. The combination of talent and platform makes Disney the envy of the media world.
While these developments are awe-inspiring, Iger has stated his plan to step down once his contract expires in 2021. Operating in an industry with new players and accelerating pace of technological change means a market lead is unlikely to last. HBO Max and Peacock, for example, are launching this year into the streaming space.
As the shine of the new streaming services wears off, and we move into a new era of Disney, a new strategy is acquired to continue to grow and take advantage of market opportunities, in both the short-term and long-term.
1. Acquire Epic Games
Growth in gaming has been startling, to the point where some predict the industry will be worth around $300 billion by 2025, with mobile gaming, VR, and cloud gaming set to grow the most in the time span. Tech companies like Microsoft (Xbox) and Sony (PlayStation) already have some level of market share in both the console space and the game creation space.
Despite all of this, Disney remains reluctant to venture more directly into the space, with Iger claiming that publishing games isn’t something they do well, and that their deal with EA is good enough in that department, with the recent offerings including Star Wars: Jedi Fallen Order. They’ve produced some quality games, and other studios, such as Square Enix, have worked with Disney on franchises such as Kingdom Hearts.
Post-Iger, Disney has to take the next step.
Video games provide narrative independence for the gamers, and are built upon storytelling and community, which are core tenets of the brand. With Disney+ off and running, there needs to be an eye to the emerging forums of media that allow for new ways to tell stories, both technologically and from a scale of audience standpoint, and video games are exactly that.
The reality is, Disney is the best in the world at experiential entertainment, and technology and broader interest have opened new doors to deliver rich forums of entertainment. As gaming studios go, Epic Games has proven to be brilliant at building that very experiential entertainment, with Fortnite proving to be one of the biggest gaming hits in recent memory. They also build their games on the Unreal Engine, which has proven to be an incredibly valuable asset in which to tell stories.
With an estimated valuation of $15 billion, Disney is paying for the audience Epic has developed with Fortnite and on the Epic Games store, as well as the Unreal Engine that can be used to build immersive gaming experiences around brand content like Marvel and Star Wars.
There is also the potential for digital advertising that stands out monetarily, with brands being likely to want to collaborate on in-game assets, which Epic has proven quite adept at. Digital skins has proven to be lucrative, and that trend is expected to accelerate, with big collaborations like 100 Thieves and FIFA.
Ultimately, the underlying proprietary infrastructure that Epic Games has built its products on allows for Disney to build its own gaming empire around the franchises that it already owns.
2. Overhaul ABC News App
News media is in an interesting place, considering our place in history and the rapid changes in distribution. ABC stands in a unique position to be impactful in the space, expanding into new forums of distribution and away from traditional linear television.
24-hour news channels are not productive in rebuilding our social fabric. Any subsidiary of The Walt Disney Company has the obligation to be representative and empathetic as they pursue the truth, and ABC has that obligation in the news space. That means an emphasis on educational content within a news context. In addition to airing live broadcasts from ABC News, building a library of content, like documentaries, podcasts, and other content on the service that serve an educational purpose, allows for news to be built upon context that ABC News provides.
A subtle shift in content and editorial standards, as well as the obvious shift toward an platform built on the same BAMTECH platform that Disney+ was built on. Ultimately, beginning a shift away from linear television and toward other D2C means is getting ahead, and allowing for more unique mediums of delivery for important information pertaining to the news of the day.
3. Sign MrBeast, YesTheory, and Marques Brownlee to a Production Deal
This point is hardly difficult to explain.
Permeating new audiences via new mediums is a clear emphasis of the post-Iger strategy, and doing so effectively means continuing efforts to drill into Gen Z. There are certain creators that leverage that audience extremely well, and reaching production deals with a few leaders for exclusive shows would be a direct way of getting Disney’s foot in the door.
Reaching deals with MrBeast, YesTheory, and Marques Brownlee would create three separate shows with different style and thrusts, consistent with Disney’s brand, while expressing awareness of rising creators and the value of their audiences. Leveraging creators in an open access format like YouTube creates a unique pipeline of talent that adds to the original content offerings of Disney.
4. Launch Disney Theaters on Disney+
The number of individuals watching movies at the theaters is dropping.
Overall ticket sales in U.S. and Canada theaters were down 4.4% from the year before through Sunday, according to data firm Comscore. That number is expected to drop, and with it, revenue for movie studios and theaters alike.
Disney is in a unique situation to be innovative for this.
Launching a TVOD service built into Disney+ focused on movies in theaters creates a seamless way for individuals to watch a movie as soon as its released “in theaters.”
Allowing people to rent the movie for a little over the total run-time (people have to pee sometimes, jeez) on one device simulates a movie experience, while also being far more convenient. There are concerns related to the financial side of it, but there are some assumptions I’m making in assuming that this makes sense long-term.
The share of revenue going to studios falls the longer a film is being shown in theaters, and a Disney Theaters service would mean consistent pricing. There is also a human nature component to the decision, as impulsive buyers who are excited to see a certain film are likely to rent it several times over the duration of the film’s time in theaters.
Showings can still happen, and Disney can invest in making them a more immersive experience, which is a nod to the die-hard fans that value the theater experience. There would simply be less showings, with a focus on greater availability and consistent pricing.
Disney has had an incredible streak of growth since Bob Iger took the reins in 2005, and he leaves the organization in a position to continue to thrive. As with any organization, though, they can’t rest on their laurels. Continued innovation is required, and these four steps build a continued foundation to allow talented creators to tell compelling stories, and for them to dominate the media space for years to come.
