Disney CEO Bob Iger shares outlook on streaming rebranding at Morgan Stanley conference
Well Disney CEO Bob Iger doing a Q&A today at the Morgan Stanley Technology Media and Telecom conference giving some insight into Disney's position, place in the ever going a streaming war. John Finance's own Ali Kanae is here with her Vibe Check on the call. Those key takeaways. Give us the Vibe Check first. What do you think? The Vibe Check? I would say it was generally positive and that's because I do think, although we don't have all the answers to all the problems at Disney right now, I do think Bob Iger set a very clear tone of where he wants to take the company. He did touch on quite a few topics from succession plans to what will be key to profitability. My top three takeaways though centered around pricing Hulu and ESPN Plus.
On the topic of pricing, Iger did make it clear that right now Disney Plus is probably a little too cheap. He said it's very easy for consumers to jump around to different streaming services and although he is very pro consumer, rationalizing that pricing strategy will be a key driver when it comes to profitability. Here's a bit more of what he had to say about that. Obviously, we have to attract more subs, but I think one of the key things that we have to figure out is a pricing strategy that makes sense. In our zeal to grow global subs, I think we were off in terms of that pricing strategy and we're now starting to learn more about it and to adjust accordingly. Keep a lookout for any possible pricing updates there over the next few quarters. Another thing he also discussed was Hulu and basically the future of Hulu, it's TBD.
Disney controls two thirds of the streaming giant, Comcast controls the rest and a decision will need to be made by January 2024 per that contract. So will they keep, will they sell? Right now all options are on the table. I think they'll listen. So it's a solid platform and it's also a very attractive platform for advertisers. It's already proven to be valuable for them and advertising has proven to be valuable for us, but the environment is very, very tricky right now and before we make any big decisions about our level of investment, our commitment to that business, we want to understand where it could go. So a more strategic approach to Hulu relative to that macro environment and then finally similar to Hulu, the murky future of ESPN, ESPN plus that has long been debated by investors, but I got remained confident that the ESPN brand is a strong one. Take a listen.
Down the road at some point, I think it's inevitable because of what's happening in media in the world and technology, it will become a direct to consumer business. And when you combine the strength of live sports and the brand and the value of advertising so that you can create a business that's not just subscriber dependent, but dependent on advertising and subscriber revenue, I think there's a reason to be bullish. There you have it. He did say he is open-minded to ESPN's future. So potentially at some point, maybe Disney could spin off the network or maybe sell just a stake in it. But from judging these comments and especially the fact that Disney recently restructured the business, ESPN is its own standalone unit. I don't think that's happening anytime soon, but Iger, he's just this force when he speaks.
He's very clear and he also demonstrated that he's willing to pivot depending on what's going around in the environment in the streaming wars. Let me ask you just your opinion. Does separating siloing ESPN allow them maybe an easier path to embrace sports gambling? Because that has been begged for by investors. He did mention sports gambling. He said right now there are no current opportunities, but he thinks it's inevitable that at some point sports programming and sports betting have to be intertwined. He even talked about his two younger sons. He's like, I don't really want them to get into sports betting right now, but I know that's something they're interested.
Bob, they're already doing it. I know, right. That's what he's basically said. And he said for younger consumers, this is important, but that has always been the argument. If you separate ESPN, maybe that makes a sports betting a little easier. Well, palatable because they're not attached to Mickey Mouse. Right, exactly.
Look, he didn't come out and say absolutely not. So I guess we'll see. Sounds like it might be on the table. All right, Allie Kanell, thanks so much.
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