This week stepping down was hot.
Salesforce co-CEO stepped down.
UberEats head stepped down.
And finally, Disney CEO stepped down.
Bob Iger’s departure came as the biggest surprise. His 15 year-run as Disney’s CEO was impressive, marked by 4 big acquisitions (Pixar, Lucasfilm, Marvel, 21st Century Fox) and launch of Disney’s own streaming service – Disney+.
So why did he step down when Disney was doing so well?
Firstly, he is now 69 years old. But hey, age is just a number.
A series of events led to this.
Netflix introduced streaming in 2007 and consumer habits started changing. People could now watch their favourite movies and shows anytime on their devices.
As a result, cord-cutting became a trend. This meant serious trouble for Disney’s traditional TV business. Disney Media Network which includes broadcast and cable television networks brings in the most revenue – far more than its movie studios and giant theme parks. In the wake of streaming, this business started becoming less and less profitable every year.
The obvious solution for the media giant was to enter streaming. But –
- Conflict of Interest – “Disney can’t rush into the direct-to-consumer model. The company still makes billions of dollars through its traditional media business. If Disney pushes too quickly into a direct-to-consumer business, its current distributors will have less incentive to pay bigger carriage fees to Disney’s outsized bundle of channels.” – NBC
- Poor track record with technology – “In 2006, Disney put a scare into the movie rental industry with MovieBeam, which was supposed to make it easy for people to order movies right into their homes. Disney and its partners put $100 million into it, but ended up selling the fledgling business for $10 million in 2007.” – NBC
- No Streaming Rights – “Disney wanted to get into streaming earlier, but the streaming rights to many of its properties were tied up with other companies like Netflix.” – Quartz
Even though odds were stacked against Disney, under Bob Iger’s leadership, the media giant successfully launched Disney+ and managed to acquire roughly 30 million users in a span of 4 months. Iger called Disney+ the biggest initiative in his 45-year tenure at the company.
Disney+ will not only allow the company to get ahead of cord-cutting but also be the component that ties all of Disney’s businesses together.
“The real opportunity is how Disney+ enables and grows the rest of Disney’s businesses—from merchandise to live events, mobile games and more. The service will allow Disney, for the first time ever, to know exactly who interacts with their content, how frequently and in what categories, and through which characters—as well as what these subscribers buy, at which (targeted) prices and when. This will be Disney+’s most important achievement, and the math shows why.” – Matthew Ball
Now that Bob has future-proofed Disney (and made a Masterclass on leadership), he wants to go back to being the creative guy and hand over the day-to-day business side to his successor, Bob Chapek.
This is why he stepped down as CEO and will be assuming the role of the executive chairman “effective immediately”.