Will Iger Unwind Chapek's Streaming Strategy, Price Hikes?

In a stunning weekend move, the Disney Board Of Directors announced on Sunday that the company’s former CEO Bob Iger is now, again, the company’s new CEO, and that his successor Bob Chapek is now also his predecessor. In a letter to shareholders, the board said that Iger has agreed to serve in the chief executive role for two years and to work with the company to develop the next Disney CEO.

“The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period,” Disney’s chairman of the board Susan Arnold said.

The Streamable reports the move comes after the Nov. 8 quarterly earnings report that saw substantial streaming subscriber growth, but also that the direct-to-consumer (DTC) segment of the company had lost $1.5 billion during the three-month period to close the company’s fiscal year.

With economic conditions continuing to worsen, it is clear that the board was ready to move backward in order to move forward. In June, the Disney board unanimously approved a new long-term contract for Chapek, which began on July 1 and was to run through 2025, meaning that removing him from the top spot now will likely come at a not-insignificant cost.

As the company’s losses continued to grow, many inside and outside of Disney began to question Chapek's strategies, from streaming to parks and everything in between. One of the major changes on the streaming front for Disney has been the changes to the pricing structure of Disney+.

While it is far too early to know if Iger will reverse course on either of those options, the shocking timing of the move does suggest that the board is bringing him back to fix some of the perceived messes that Chapek’s tenure has created. With the upcoming price increases taking Disney+’s top tier to $10.99 per month and $109.99 per year, the rates won’t be the highest in streaming, but they will no longer be in the affordable middle ground either.

Clearly, the amount of money that Disney was losing in streaming is not sustainable. So, reversing course on the price increase or abandoning the ad-supported tier seem unlikely at this point, especially as the streaming industry has changed dramatically since Iger was last in charge. However, that doesn’t mean that the returning executive won’t be looking at other ways to turn things around on the streaming side of the business.

Throughout the year, Disney+ has moved further and further away from the family-friendly vision that Iger originally began working towards. From the introduction of R-rated films to the platform in the United States to the integration of the Star platform into Disney+ internationally, the tenor of the service has changed rather dramatically.