Bob Iger Admits Excessive Spending on Disney’s Streaming Debut

Disney CEO Bob Iger gave a “Mea culpa” for big losses incurred while launching streaming platforms like Disney+ during an investor conference appearance on Wednesday.

“As we got into the streaming business in a very, very aggressive way, we tried to tell too many stories. Basically, we invested too much, way ahead of possible returns. It’s what led to streaming ending up as a $4 billion loss,” Iger told the Moffett Nathanson Media, Internet & Communications Conference during a session that was webcast.

Iger addressed a falling out with his hand-picked successor, former Disney CEO Bob Chapek, whose tenure he called out for lavish and misplaced content spending. “It was clear to me that our structure was not working, because we were removing accountability from those that were basically investing the most capital was a mistake,” he argued.

Iger said Chapek had moved the P&L (profit and losses) responsibility to the studio’s distribution arm, a move he reversed on his return as CEO in 2022.

The result of spending more on content than could be turned to profit “resulted in volume and not quality, which turned out to be a mistake,” Iger added. The Disney boss conceded volume was required to win the streaming wars against rivals like Netflix and Prime Video.

But he added: “There’s a very fine line that you can cross and get in trouble if your volume ends up diluting management’s attention to what is being made is right. And that’s what happened to us. So I have pulled that back,” Iger told the conference.

As part of his turnaround plan for Disney, Iger said he reinstalled a link between the creative and monetization sides of the studio “to basically help guide what was being made, when it was being made and where, meaning internationally.”

He reiterated his respect for rival Netflix for being able to engage users with appealing content. “I’ve been telling everybody good isn’t good enough. It has to be great. Just keep driving that, but if you force them to make too much, then that becomes almost impossible to do,” Iger added, returning to the thorny question of balancing volume with quality.

To drive engagement, Iger’s evolving streaming strategy has included bundling Disney+ with Hulu. “I won’t get into too many details there, but if you are a Disney+ subscriber, for an extra $2 you can get Hulu ad-supported … The combination of those two is an engagement play more than anything