Disney CEO Bob Iger said Marvel Entertainment, whose acquisition in 2009 was a signature deal of Iger’s first stint atop the company, was unfairly “taxed” during the company’s frenzy to supply Disney+ with fresh content.
In a lengthy sit-down with CNBC’s David Faber (watch a clip above), Iger addressed Marvel as well as topics like the SAG-AFTRA and WGA strikes; a looming revamp of the company’s linear TV assets; and the ongoing feud with Florida Gov. Ron DeSantis. Along with Pixar and Lucasfilm, the CEO said, Marvel had been asked to do too much by former CEO Bob Chapek, Iger’s hand-picked successor who was ousted last fall.
“In our zeal to basically grow our content significantly and serve our streaming offerings, we ended up taxing our people, in terms of their time and their focus, way beyond where they had been,” he said. “Marvel is a great example of that. They had not been in the TV business at any significant level. Not only did they increase their movie output, but they ended up making a number of television series” for Disney+. That surge “diluted focus and attention” both internally and for audiences awash in new titles, Iger said. “That is more the cause than anything else.” The exec took pains to note that “it’s not a problem from a personnel perspective.”
The comments built on those delivered by the Disney chief at a Wall Street conference keynote last March. He said then that the Marvel brand is “not inherently off,” but he mused about whether “you need a third or fourth” sequel built around characters with resonance mainly among hardcore fans. Ant Man and the Wasp: Quantumania, the third installment in that franchise, suffered Marvel’s steepest-ever second-week drop at the domestic box office earlier this year. Overall, Disney is mired in a theatrical slump, spanning animation, Lucasfilm and Marvel, but Iger noted the company is still No. 1 in global market share in 2023 to date.
Iger is spearheading a cost savings drive aimed at taking $5.5 billion in expenses out of the company’s operations, an initiative that has entailed 7,000 layoffs in recent months. In addition to staff reductions, Disney is reining in spending across the board. Iger said, the central goal for Marvel and other content pillars is “spending less on what we make, and making less.”
Pulling back will refocus employees and talent, Iger said, and also suits the cost-containment moment. Chapek announced the firehose of sequels and streaming titles at the end of 2020, when Disney stock was rocketing to new highs despite Covid; it now trades at about half its 2021 level.
Prior to mounting a direct-to-consumer effort leading to the launch of Disney+ in November 2019, Disney could make money from film and TV titles by licensing to Netflix. Faber asked Iger if he regretted foregoing that longtime revenue source in order to prop up Disney+.
“If we hadn’t done it, everybody would be saying, ‘Why isn’t Disney going to the streaming business?’” Iger said. “As it turns out, I think we made the right decision there to go into that business. it will be a growth business for us. We will turn it around, I’m confident of that.” Having a direct relationship with film and TV consumers, as Disney long has had in its theme parks unit, “will be of value to us long-term,” Iger added.