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Disney CEO Bob Iger cites Hamilton as he paves the way for cuts and price increases at Disney+

Disney CEO Bob Iger cites Hamilton as he paves the way for cuts and price increases at Disney+

A lot has changed at Disney in the two years since returning CEO Bob Iger stepped down — but he assured company employees Monday that “our Disney world is still spinning.”

Speaking at a town hall event for Disney employees, Iger said the company would shift gears when it came to its streaming business — which includes Disney+, ESPN+ and Hulu — and make profitability its top priority.

“Instead of chasing subscriptions with aggressive marketing and aggressive spending on content, we need to start chasing profitability,” he said in comments reported by Reuters. “To achieve that, we need to take a very, very hard look at our cost structure across our businesses.”

Iger’s return to the helm of the entertainment giant, which saw former CEO Bob Chapek ousted, came days after Disney disclosed a $1.5 billion loss at its streaming division for the fourth quarter — more than double the loss a year earlier.

On the back of the disappointing financial results earlier this month, Chapek announced cost-cutting measures that included plans for job cuts and hiring freezes.

When asked about the hiring freeze, Iger said it “felt like it was a wise thing to do.”

“At the moment I have no plans to change that,” he said.

Under Chapek, Disney invested billions in its streaming platforms and drastically increased spending on original content as part of its growth strategy. That strategy helped Disney build a subscriber base to compete with Netflix, but the company warned when it released its fourth-quarter results that streaming growth could soon begin to slow, and streaming losses have been on Disney’s shareholder radar for the past year.

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The company will launch a cheaper, ad-supported Disney+ subscription in the US in December in a bid to boost subscriber numbers and revenue through advertising – something it hopes will help put the company’s streaming business on the road to profitability.

That was told by analyst Brendan Brady The Wall Street Journal on Monday that the “three ways to chase profitability here are to cut costs, raise prices and add subscribers.”

Earlier this year, former CEO Chapek said that even considering Disney’s plans to raise subscription prices on its flagship streaming platform, Disney+ was “vastly underpriced.” The service is usually cheaper than what it costs for a subscription to rival platforms such as HBO Max and Netflix.

In a nod to the Broadway musical “Hamilton,” Iger told Disney employees Monday, “The status quo is gone, a lot has changed, but the sun still shines and our world, our Disney world, still spins” — a paraphrase of the song “What’d I Miss?”

Disney shares closed about 3% lower on Monday, but rose slightly in premarket trading on Tuesday morning. The company’s shares have lost almost 40% of their value since the beginning of the year.

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