CEO Bob Iger revealed on Thursday that Walt Disney’s (NYSE:DIS) streaming service would implement measures to address password-sharing, commencing in June. This initiative aims to bolster subscriber growth and enhance the profitability of the entertainment conglomerate’s streaming business.
In an interview with CNBC, Iger also emphasized the necessity of consolidation within the streaming industry. He expressed Disney’s long-term goal of achieving double-digit margins for its streaming business.
Netflix’s recent crackdown on password-sharing contributed to its significant subscriber growth, surpassing Wall Street expectations by adding nearly 22 million subscribers in the latter half of 2023.
Iger’s remarks followed a proxy battle between Disney investors and activist investors, including Nelson Peltz, who raised concerns about Disney’s performance in the streaming-television era. Disney shareholders decisively supported Iger and the company’s directors in the proxy vote, reaffirming confidence in the board’s leadership.
Regarding CEO succession, a pivotal concern for shareholders, Iger assured that Disney is taking the matter seriously and is committed to addressing it appropriately.
The proxy vote victory strengthens Iger’s position at a critical juncture. Disney is focused on revitalizing its film and television franchises, ensuring profitability in its streaming unit, and exploring partnerships to enhance ESPN’s digital presence.
Following Iger’s interview, Peltz expressed hope that Disney would fulfill its commitments, indicating that he would refrain from further intervention if Disney followed through.
Iger also addressed criticism from billionaire Elon Musk, who supported Peltz and previously criticized advertisers like Disney for withdrawing from social media platform X due to concerns over antisemitic content. Iger dismissed Musk’s criticism, stating that he ignored it.
Disney shares experienced a modest increase of approximately 0.7% in morning trade following Iger’s announcements. Year-to-date, Disney shares have surged by approximately 30%, making them the top performer on the blue-chip Dow Jones Industrial Average.
Additionally, Iger mentioned ongoing discussions regarding strategic partnerships for ESPN’s future development.
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