Bob Iger is back, and his sights are set on Disney+

The news: In a surprise announcement Sunday, Disney replaced one CEO named Bob with another, removing the two-year CEO Bob Chapek and replaced him with his predecessor Bob Iger.

In a statement, Disney thanked Chapek and said Iger would return for a two-year term to lead the company through an “increasingly complex period of industry transformation [that Iger] is uniquely positioned to lead the company through.” According to The New York Times, the CEO switcheroo came as a surprise to Chapek.

Hello Bob, Hello Bob: If Iger expanded Disney’s horizons, to acquire star wars, Marvel and other properties that transformed Disney into one of the largest conglomerates in the world, Chapek laser-focused them again around streaming.

• The company went all-in on Disney+ under Chapek’s leadership during the pandemic, but recent earnings reveal the strategy led to heavy losses. Disney has struggled to make money on its flagship streaming service. In Q3, losses almost doubled to $1.45 billion despite a dramatic increase of 12.1 million subscribers. But Disney warned that even those numbers would begin to decline in the following quarters.
• At the same time, Chapek’s tenure oversaw significant political failures and internal strife that damaged Disney’s prime and proper brand reputation. Chapek’s passivity around Florida’s “Don’t say gay” bill early in the year, the company won the ire of hurt employees as well as Florida politicians and hurt consumer perception. Public fights with stars like Scarlett Johannsen also damaged reputations.
• Iger is seen as an outstanding leader of the company. During his tenure, Disney acquired Pixarmarvel, Lucasfilmand more—acquisitions that propelled Disney from media giant to media empire and holder of beloved creative properties.

The power problem? Chapek’s leadership coincided with the pandemic and was mostly centered around the launch and development of Disney+. Now the streaming service is a—maybe the-the center of Disney’s operations. But it is not without setbacks.

• The streaming market is incredibly competitive, and was even before Disney+ launched in late 2019. The extreme saturation of the US streaming market has hurt nearly all streamers, slowed subscriber growth, and left companies scrambling to find markets to expand into and ways to increase average revenue per user (ARPU).
• For Disney, it comes in the form of more expensive subscriptions, streaming ads and talk of a Amazon-as “Prime” service. These are relatively good ideas used by competitors, but therein lies the problem. As Disney continued to stream, it suddenly became like everyone else: no longer a singular brand, but yet another streaming service subject to the same woes as its rivals.
• Even the upcoming ad-supported tier for Disney+ is a change from the company’s previously guarded stance around advertising.

The future under Iger: It’s too late for Disney to abandon streaming, and it’s not a good idea to do so either. But Iger’s second term is likely to see a significant restructuring around the streaming service and an attempt to revive Disney’s brand identity. Iger is known for his high-impact acquisitions and could look to make similar moves now that he’s back at the helm.

• The past year hasn’t been kind to streaming, advertising and media in general, which means companies like Roku or others that could significantly advance Disney’s streaming position have suddenly become much more affordable to snap up.