For Bob Iger, the Transformation of Walt Disney Co. Means Cashing in on Streaming

November 21, 2019 9:30 am Published by

When November 12 rolls around and Walt Disney Co. let’s loose its streaming service Disney +, CEO Bob Iger will likely be watching like a proud father. After all, Iger has made it clear he feels streaming of Disney’s prolific content library will secure the company’s future, and he’s spent billions on the biggest movie franchises to move the entertainment giant towards that goal. In a Bloomberg Businessweek article, Iger says his decision to follow the streaming business model largely came in August 2015 when Disney’s main cable division, ESPN, reported a noticeable drop in subscriptions accompanied by a noticeable 9 percent fall in share price. Not too long afterwards, Disney acquired in BAMtech LLC, a livestreaming company owned by Major League Baseball. Using BAMtech’s technology, which drastically improves the quality of sports video, Iger has pushed Disney forward in its quest to compete, and some would say, conquer its competitors, i.e., Netflix Inc.

The markets seem to be on board with Iger’s game plan. Disney’s share price has risen by 13 percent since April when the company announced its entry into the streaming sector. Some analysts such as Michael Nathanson, founding partner at MoffettNathanson, feel Iger’s moves will steer Disney into huge wind that is the streaming market, “The market is sensing big things are brewing in the quarters ahead. As we have vividly seen at Netflix, when moving in the right direction, momentum in subscriber growth makes those metrics investors’ sole focus.”

Perhaps, with that type of enthusiastic expectation, it’s not surprising that there’s been little concern about the 28 percent decrease in diluted earnings per share (EPS) from $1.48 percent to $1.07 EPS which Disney announced for its fourth quarter. The decline is still higher than analyst expectations which forecast 95 cents EPS. Revenue however, shot up by 34 percent to $19.1 billion, mainly because of the $71 billion acquisition of 21st Century Fox Inc. in March.

In releasing the fourth quarter earnings, Iger commented, “Our solid results in the fourth quarter reflect the ongoing strength of our brands and businesses. We’ve spent the last few years completely transforming The Walt Disney Company to focus the resources and immense creativity across the entire company on delivering an extraordinary direct-to-consumer experience, and we’re excited for the launch of Disney+ on November 12.”

Walt Disney Co. share price has risen about 4 percent in trading today.

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