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Bob in. Bob out. Where does Disney go now?
The OG Bob returns to Disney. I expect big moves and changes. We have to wait to see what he has in store for us. In the meantime, we can speculate. Let's get to it.
After a 15-year run as the CEO of Disney, Bob Iger (Bob1 for short) stepped down in 2020. The impact of his tenure was significant. He orchestrated the now-famous string of content and IP acquisitions.
Pixar. Marvel. Lucasfilm. 20th Century Fox. Pretty solid.
He pulled content off of Netflix to launch a native Disney alternative. He did a lot of things well. The Disney of today is a result of Bob1's vision, strategy and execution.
The Painful Last Chapter
The one thing he didn't succeed with was succession. His handpicked successor, Bob Chapek (Bob2 for short), lasted less than two years on the job. On the 20th of November, Bob2 was out the door. And Bob1 returned.
To be fair, Bob2 didn't have the wind in his back. He barely got started before the Covid-19 outbreak. The world paused for two years and shut down most of the entertainment and live experience industry. Then the world headed straight into an economic downturn. Ouch.
Still, he also threw gravel in front of his kick-sled (Norwegian saying). Considering his short time at the helm, he threw quite a bit of gravel.
Restructured the company. Most of the power transferred to the distribution side of the business. Opposite of Bob1s content-first orientation.
Picked a public fight with Scarlet Johansson over compensation
Failed to take a (swift) stand for the LGBTQ+ community during all the noise regarding the "Don't say gay" bill in Florida.
Eventually, the kick-sled came to a full stop.
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Bob2 out. Bob1 back in.
Bob1's first order of business back on the job? Reversing the organizational structure, putting content back in the driver's seat. Take that, Bob2.
Now, Bob1's got a chance to rewrite the last chapter of his Disney career. There are two things that he'll focus on:
Retry the succession planning thing
Turn Disney+ streaming into a viable business (while Bob2 had to answer for the big losses of streaming this year, Disney+ was and is a Bob1 project).
Assuming Bob1 fixes both – the big question is: what else?
Bob1 is a long-term thinker. He understands the shifts at the intersection of entertainment and technology better than most people. And he's got the guts to place his bets accordingly.
For instance, he pulled Disney content off of Netflix long before Disney's streaming service launched. He gave up short-term revenue to position the company for the long term.
That's special and impressive as a public company CEO. Most will over-index on short-term optimizations, earnings call by earnings call. Even more so, he managed to get Wall Street to believe in his plans.
Bob1 is also an empire builder. Acquiring companies, IP, and tech for scale and speed is part of his operating DNA. So, now that he's back for (at least) a couple of years, we can assume his fingers are itching to pull the trigger on something.
He’s got the chance to put Disney on the trajectory for its next ten years. I don’t think he’ll pass on that.
I see a few opportunities:
The acquirer becomes the acquiree
Tapping into The Creator Economy
Sourcing franchise ideas from web3 culture
The acquirer becomes the acquiree
Bob1 revealed in his 2019 book "The Ride of a Lifetime" that he and Steve Jobs talked about how Apple and Disney might be a good fit. The two became close pals after Disney acquired Jobs' Pixar in 2006.
The ultimate power play for Bob1 could be to orchestrate the acquisition of a century: Apple acquiring Disney. If that were to happen, Bob1 would not have to try the whole succession planning thing again. Instead, he would be the last independent CEO of Disney. Quite the story right there.
While an acquisition like that would be jaw-dropping, there are many ways to pick the idea apart:
We can assume that an Apple + Disney merger would undergo heavy antitrust scrutiny.
Disney is a lot more than content and streaming. Theme parks, cruise ships, hotels. Not exactly Apple's specialty.
Tim Cook is not a visionary acquirer but a steadfast operator focusing on iterative improvements.
But Apple's sitting on a $200B pile of cash and investments. At some point, investors will expect them to do something with it. Something more active than creating the real-world version of the Scrooge McDuck Money Bin.
Betting on content and IP might not be the craziest way to spend that cash.
Tapping into the Creator Economy
One option is to acquire a position in the creator economy. More people create content online now than ever before. That growth will continue.
In line with this trend, people consume different kinds of content now. Like short form video on TikTok. Further, AI will augment people's creative capabilities. Enabling the creation of even more high-quality content.
All of this creation and consumption is happening outside of the Disney ecosystem.
Bob1 was close to buying Twitter some years ago. Only to do a 180 and pull out of the deal last minute. Twitter's off the table now as emperor Musk is ravaging the company.
Pinterest is like the friendly, shy, quiet kid in the social media class. Nobody pays too much attention to them, which might be a mistake. Pinterest is a visual platform with nearly half a billion monthly active users (per Q3 2022).
For Disney, Pinterest could be a foundation to build a rich ecosystem for online creators. It's also a destination where they can integrate existing Disney content, and introduce commerce.
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Disney's never figured out a proper way to capture engagement and revenue from gaming on their own. They tried several times but ended up doing licensing deals in the gaming space.
Gaming is a $200B industry – the biggest vertical in on-screen entertainment.
The lines between gaming and "digital socializing" are blurring. Experiences like Fortnite and Roblox lead this charge.
Disney could buy Roblox. Put a stake in the ground. "This is the foundation of our digital world-building".
It's a friendly game-like environment. It lends itself well to extending the value of existing Disney IPs like Star Wars and Marvel.
Roblox has a user base that trends young. Making it an attractive place for Disney to cultivate a relationship with the next generation of consumers.
Sourcing franchise ideas from web3 culture
A different, and more badass route, is to pursue the emerging web3 culture. Last year, Nike acquired web3 digital collectibles studio RTFKT in a move that will be seen as absolutely genius ten years from now.
Nike's move put them at the forefront of consumer web3. One interesting thing to note is this: Nike didn't approach web3 culture by trying to transfer their current brand content (sneakers) into the movement.
Instead, they bought an authentic position in the middle of it (RTFKT). They've continued growing that initiative and the community around it. All in a web3-native way. Separate from their core business.
Nike recently announced their .SWOOSH initiative. The RTFKT initiative will continue as a niche thing for web3-natives. But, they're taking the learnings from that and creating a bridge with the Swoosh thing. That's where Nike plans to connect with most of its customers and fans in a digital-first environment.
How does this relate to Disney? Culture and relevancy. The tentpoles in Disney's content portfolio are global phenomenons. But can they continue to cram out Marvel and Star Wars movies forever? Probably not. There's already talk in Hollywood about "Marvel & Disney fatigue".
At some point, they will create or acquire and grow net-new story universes. Creating new IP with the franchise-potency is hard. In fact, it's a high-risk bet that fails more often than it succeeds.
Another option is to identify seeds of culture relevance. Buy and develop it. Bring it into the Disney business flywheel.
Disney could (and should) pursue the same strategy as Nike:
Acquire one (or more) web3 native entertainment/video properties
Continue developing it as a niche thing while learning from it
Integrating the learnings into the broader Disney content ecosystem
I could see Disney picking up a Web3 brand like Doodles or Cool Cats to experiment with Web3. Or Yuga Labs, building their mini-web3-Disney ecosystem through acquisitions over the past year.
Bob1's back. Given his history of big, long-term moves, it's hard to envision him staying in his seat for two years and only plugging leaks. Even if he's said that he won't be pursuing any big acquisitions.
We'll see something big. Bob1's going to go for the grand finale.
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