Disney’s Strategic Focus: Strong Sequels and Original Content

Disney CEO Bob Iger is actively addressing the content problem at Disney Studios as part of his ongoing efforts to turn around the company’s fortunes. In its recent quarterly earnings report, Disney not only surpassed expectations with its Disney+ streaming service but also revealed plans to exceed cost-cutting targets by $2 billion. This positive news has led to a 3% surge in Disney’s after-hours trading.

Revamping Disney’s Studio Business

To achieve these cost-saving goals, Disney plans to streamline its studio business by focusing on creating fewer but higher-quality films, according to Iger. In recent years, despite releasing massively expensive blockbusters from renowned brands such as Pixar, Marvel, and “Star Wars,” the box office results have often fallen short of Disney’s standards.

Quality over Quantity

Recognizing the negative impact of quantity on overall quality, Iger acknowledges that losing focus due to an overwhelming number of releases has contributed to the lackluster performance. He emphasizes the need for consolidation and a shift towards prioritizing quality. The talented team at the studio, including Iger himself, is committed to rolling up their sleeves and working towards achieving this goal.

Reducing Reliance on Sequels

Iger also expressed the sentiment earlier this year that Disney should reduce its reliance on sequels. He believes that Marvel, in particular, tends to revisit familiar storylines too frequently and emphasized the importance of exploring fresh and innovative narratives.

Financial Stability and Workforce Maintenance

Kevin Lansberry, Disney’s interim CFO, reassured that the company does not anticipate any further layoffs after already eliminating 8,000 positions in the past year, exceeding the originally announced reduction target of 7,000 jobs.

As Disney continues its turnaround efforts, the company’s focus on producing higher-quality content while reducing costs demonstrates its commitment to delivering exceptional entertainment experiences to its dedicated audience.

Disney’s Strategic Focus: Strong Sequels and Original Content

Disney CEO Bob Iger revealed the company’s strategic plan to strike a balance between creating “really strong sequels” and producing compelling original content. Starting off their slate, Disney will be releasing “Wish,” an animated musical fantasy film, during the Thanksgiving weekend.

In addition to “Wish,” Disney has several other exciting projects in the pipeline. This weekend, they are premiering the superhero sequel “The Marvels.” Moreover, fans can anticipate sequels for well-known franchises such as “The Lion King,” “Toy Story,” “Frozen,” “Zootopia,” and “Avatar.” Notably, Pixar Animation’s “Elemental” has already achieved remarkable success, grossing close to $500 million worldwide and becoming the most-viewed movie on Disney+ this year.

Responding to a question about potentially following Warner Bros. Discovery’s recent move to license core content to Netflix, Iger clarified that while Disney presently licenses some content to Netflix, it does not need to license its core brands like Pixar, Marvel, or “Star Wars.” He stressed their significance as essential building blocks for Disney’s streaming business and questioned the necessity of chasing short-term financial gains.

Disney’s entertainment segment, which encompasses its streaming business, experienced a 2% revenue growth in the quarter. This growth was primarily driven by a notable 12% rise in the streaming business. However, linear television and licensing content, including theatrical releases, faced declines of 9% and 3%, respectively.

Although Iger did not provide specific targets for investors to assess improvements in the studio business or indicate when they might be achieved (2024 or 2025), it is clear that creating new and compelling content is crucial for the studios’ recovery. The tentative resolution of the Hollywood writers strike is expected to pave the way for fresh content production.

While Iger remains committed to helping Disney’s studios rebound, it is important to acknowledge that this process may take longer than investors had initially anticipated.