Disney's Bob Iger: Streaming Is The Future of Media

Ahead of this week's launch of the Disney+ streaming service, Disney CEO Bob Iger, 68, tells Devin Leonard for a Bloomberg Businessweek cover story: "This is, no question about it, the future of media."

Until recently, if you wanted to watch the Disney Channel or ESPN, you had to buy a cable subscription. If you wanted to see a first-run Avengers film, you had to go to a movie theater. And if you wanted to catch it online, you subscribed to Netflix.

Now, Disney has the pipes, too, thanks to its $2.6 billion purchase of a controlling stake in New York-based streaming-technology company BAMTech. And it’s made a big bet that not only can its technology match its competitors’, it can overwhelm them on price, with a monthly fee of $6.99, well below Netflix’s standard $12.99. Disney will also spend $1 billion on new shows and films next year—a figure that will soon double. Marvel’s offerings will include one based on Loki, the adopted brother and sometime nemesis of The Avengers’ Thor. Pixar’s will include Monsters at Work, featuring Monsters, Inc.’s Mike and Sulley, voiced by Billy Crystal and John Goodman, respectively.

Before Disney revealed the first details of its productions to Wall Street analysts in April, investors had reason to be skeptical of the company’s streaming ambitions. Its year-old sports service, ESPN+, had 2 million subscribers but no profits, while Hulu, which Disney took control of in its Fox deal, had more than 25 million U.S. subscribers but was hemorrhaging cash. When it rolled out its new fare, complete with footage, though, “there were two audible gasps,” says Jessica Reif Ehrlich, a media analyst with Bank of America Merrill Lynch. “One was when they announced the price, which is way lower than anyone expected, but also when Jon Favreau showed the clip from 'The Mandalorian'. Every guy in the room went crazy.” The next day, Disney’s share price leapt more than 13%.

The consensus now is that Disney+ will easily meet its hopes for 90 million subscribers globally by 2024, and that ESPN+ and Hulu will add to their totals, bringing the company to as many as 160 million streaming customers. That’s not quite in the realm of Netflix, which is expected to have up to 300 million by then, but a very good start.

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