By Reuters | Updated: April 5, 2024
April 4 (Reuters) – Walt Disney’s (DIS.N) streaming service will start cracking down on password-sharing from June, CEO Bob Iger said on Thursday, as the entertainment conglomerate looks to boost subscriber growth and make the business profitable.
Iger also signaled a need for consolidation in the streaming industry and said Disney was “eventually” looking at double-digit margins for the business, in a wide-ranging interview with CNBC.
Streaming rival Netflix’s (NFLX.O) password-sharing crackdown had helped it add nearly 22 million subscribers in the second half of 2023 and shatter Wall Street expectations.
Iger’s interview came just a day after Disney investors backed him and other company directors in a proxy battle with activist investors, including Nelson Peltz, who argued that the Mouse House had underperformed in the streaming-television era.
“The proxy vote was a decisive, true endorsement of the board,” he said, noting the company was taking the topic of CEO succession – a key concern of shareholders – “very seriously”.
The win strengthened Iger’s hand at a crucial time. Disney is trying to reinvigorate its film and television franchises, make its streaming unit profitable and find partners for building sports network ESPN’s digital future.
Meanwhile, in an interview with CNBC just minutes after Iger’s, Peltz said he hoped that the Disney CEO can keep his promises.
“If they do it, they won’t hear from me again,” Peltz said.
Iger also addressed criticism by billionaire Elon Musk, who backed Peltz and had lashed out against advertisers including Disney with a profanity-laced tirade in November for fleeing social media platform X on concerns over antisemitic content.
“I ignore it,” Iger said of Musk’s criticism.
Disney shares were up about 0.7% higher in morning trade. They have risen about 30% so far this year, making them the top performer on the blue-chip Dow Jones Industrial Average.
Iger said on Thursday that talks were going on for the strategic partner for ESPN.
© Thomson Reuters 2024
