Bob Iger Talks Disney's Streaming Service, 'Roseanne,' James Gunn and a Coming 'Star Wars' "Slowdown"
The Disney CEO and most powerful person in entertainment opens up about his plan for a Netflix rival, ESPN’s politics problem and how #MeToo has changed his company
Walt Disney Co. CEO Bob Iger remains the most powerful person in entertainment, only adding to his empire with $71 billion of 21st Century Fox assets. But his dominance is one of the few things that hasn't changed since THR published 2017's list of Hollywood's most influential figures.
Along with Disney-Fox, 2018 saw AT&T win a judge's blessing to acquire Time Warner, spawning a new entity whose chief, John Stankey, arrives at No. 4. There were the milestones: Filmmakers Ryan Coogler (No. 93) and Jon M. Chu (No. 97) brought inclusive movies to the multiplex, smashing records along the way. And there are the movements: #MeToo and Time's Up drove a reckoning. Out of work, and off the THR 100, are John Lasseter, Roy Price, Brett Ratner and, just this month, Leslie Moonves. His spot has gone to Ronan Farrow, whose reporting took the CBS chief down. White men make up 70 percent of this list — but the sands are shifting, more rapidly than ever, as THR takes stock of Hollywood power now.
If Hollywood has become a kill-or-be-killed battleground, Bob Iger is the lead hunter.
Starting with Pixar in 2006, the Walt Disney Co. CEO has bulked up his company into a $160 billion content behemoth with the tools — Marvel heroes, Star Wars droids and, thanks to June's $71.3 billion acquisition of most of 21st Century Fox, a trove of new networks and IP — to take on much larger digital giants like Amazon, Apple and Facebook. Iger, 68, tops the THR 100 for the third year in a row, with Disney revenue up 7 percent to $15.2 billion and operating income up 5 percent to $4.2 billion in the most recent quarter. But he's not without challenges. A risky streaming service, set to launch in 2019 and aimed directly at Netflix, will cost billions, and the erosion of cable TV subscribers drags on the once-untouchable networks business.
At the same time, the integration of Fox assets (and executives) and the scandals that led to the forced exits of John Lasseter at Disney/Pixar (harassment), John Skipper at ESPN (drugs), Roseanne Barr at ABC and James Gunn at Marvel (both over offensive tweets) raise culture questions. And there's the issue of who will replace Iger when (or if?) he finally retires.
In a talk with THR editorial director Matthew Belloni, Iger discussed his plan for Disney "to not only survive but to thrive in a world that doesn't look anything like the world that existed just a few years ago."
Amid all the industry upheaval, from your seat, what is the content industry going to look like in five years?
You call it upheaval, I guess that's one way to describe it. I believe we have to look at this as opportunity versus threat. Meaning I've tried to manage this company … in a way that enables us to not only survive but to thrive in a world that doesn't look anything like the world that existed just a few years ago.
There are three ways to do that. The first is make great content. And this is very relevant to the Fox acquisition. The second is to be incredibly innovative about how you bring that content to market. By the way, there isn't a better example than Netflix. The third is to be truly global in nature.
The streaming service advances the second and third goals.
It’s a direct relationship with customers: the ability to provide more customized, personalized experiences; new ways to monetize; a proximity to a customer that doesn’t have intermediaries. You're going to see growth in direct-to-consumer businesses. You're probably going to see less channel watching; we're already seeing that. You're probably going to see less bundling of channels and more selling of specific brands, programs, etc.
How do you see the recent interest in premium content from the digital giants?
I'm impressed with what has been accomplished at Netflix and Amazon. But none of them is either Disney or Marvel. Or Pixar. Or Star Wars or National Geographic or FX or Searchlight or Avatar — I could go on. So we enter the business that they're in, in many respects, with an advantage from a content perspective that will enable us to focus on quality rather than just volume.
AT&T CEO Randall Stephenson recently compared Netflix to Walmart. Do you agree?
Well, I happen to like Walmart; we do a lot of business with them. So maybe I'd say it a different way. They're a volume play with a lot of quality within their volume. And we're going to be a quality play with enough volume and enough scale to provide the consumer with a good price-to-value relationship.
That takes investment. Do you anticipate a Netflix-type increase in spending?
No. First of all, I don't know what Netflix is spending. You may know more than I do. If you really look across all of our businesses and you include ESPN and ABC and ABC News and what we're buying with Fox, we probably spend upwards of what they're spending. It's just that we're distributing differently. So the pivot for us is not necessarily substantially more spending, it's substantially different distribution. But while we're migrating to new distribution models, we have to spend enough [to populate] the new distribution until we can move content on the older ones over.
Ken Ziffren wrote a recent piece for Hollywood Reporter estimating a couple billion dollars of revenue from various windows will go away when you put this content into the new streaming service.
Two things are happening here. We're weaning ourselves off licensing revenue from third parties. That kicks in, really, in 2019, when the movie studio output, which was licensed to Netflix, will cease in terms of new films. At the same time, we are investing more in content to seize these direct-to-consumer businesses before we can move content from the more traditional platforms over. So there's more spend in production and there's less licensing revenue. There will be an impact on our bottom line in fiscal '19 because of what I just described, and it's with the full support of the Disney board because we all believe that the reality of transformation is staring us in the face, and we have to transform with it. In order to transform successfully, it means that you're going to go through a period of time where you've reduced your profitability somewhat. It's the right thing because we're playing the long game and not the short.
The Fox deal has brought a lot of new people into the company. How much does the question of who will succeed you impact the discussion of how to integrate these people?
Very good question. We’re going to take the best people from both companies and that's who's going to basically be on the playing field for us. Meaning, talent will prevail. Fox Searchlight is a great example. You look at FX, NatGeo. Yeah, you’re buying libraries and brands, but you're also buying the people. I'm not going to talk about specific people right now except to say that I've met with virtually the entire senior management team at Fox and I'm not only fully engaged with them on what the possibilities for them might be but I'm excited about the prospects.
Rupert Murdoch will be one of your biggest shareholders, are you prepared for him wanting to get you on the phone at all hours?
Rupert's been able to get me on the phone whenever he wanted to anyway. (Laughs.) I've had a good relationship with Rupert over the years and it's been one of mutual respect. I'm not in any way talking about politics, but he's impressed me with his guts and his vision. If he's got an idea or two as a shareholder that he wants to give me, that's not necessarily bad news.
He may think ABC News is too liberal.
I'm not worried about that at all. He's smarter than that. Plus he's a competitor in that regard.
You've had shake-ups at the various businesses this past year. How has ESPN changed specifically, if at all?
I have nothing but praise for the job Jimmy Pitaro has done at ESPN. There's been a big debate about whether ESPN should be focused more on what happens on the field of sport than what happens in terms of where sports is societally or politically. And Jimmy felt that the pendulum may have swung a little bit too far away from the field. And I happen to believe he was right. And it's something, by the way, that I think John Skipper had come to recognize as well. But Jimmy coming in fresh has had the ability to address it, I think, far more aggressively and effectively. He has brought back some balance.
How involved do you get in decisions to cancel Roseanne at ABC or fire James Gunn at Marvel?
I would say there is a blend of my helping to make the decision to my supporting the decisions that have been made. Roseanne was completely unanimous. We discussed how it would be communicated and when because there were a number of entities that had to be properly filled in, but the decision was completely unanimous. The James Gunn decision was brought to me as a unanimous decision of a variety of executives at the studio and I supported it.
There was backlash. You still support it?
I haven't second-guessed their decision.
Has the culture at Pixar changed at all in the past eight months since the exit of John Lasseter?
Any time that you change leadership there is an inevitable cultural shift. There was a cultural shift at Disney when I took over for Michel Eisner after 21 years. John Lasseter was in his role for a long time, had an enormous influence on both the culture and the creativity of Pixar, and so of course in John leaving there is inevitable and was an inevitable cultural shift. To get into the details, I'd prefer not to.
What has changed within Disney as a whole as a result of the #MeToo movement?
I don’t want to talk about anybody, specifically, but it's critical for us as leaders in this industry to create safe environments for people who have been victims of abuse to speak up and feel safe about speaking up and for others who have witnessed abuse to do the same. It's critical. As difficult as this time may seem, it's high time that we all woke up to the need to protect the people that work for us and work with us.
How are you doing that?
First of all, you have to address specific issues with people, but beyond that, you have to make sure that you’re applying one standard to the company for all. There aren't two standards based on title, rank, importance, talent, whatever. Second, you've got to communicate very, very effectively to people that if they are a victim, if they have witnessed this, they must come forward because in not doing so they are only perpetuating an unsafe work environment, and that's not good.
How is Marvel going to absorb Fox’s X-Men franchise? Is Kevin Feige going to oversee everything?
I think it only makes sense. I want to be careful here because of what's been communicated to the Fox folks, but I think they know. It only makes sense for Marvel to be supervised by one entity. There shouldn't be two Marvels.
So Deadpool could become an Avenger?
Kevin's got a lot of ideas. I'm not suggesting that's one of them. But who knows?
Many believe Disney should pump the breaks and not put out a Star Wars movie each year.
I made the timing decision, and as I look back, I think the mistake that I made — I take the blame — was a little too much, too fast. You can expect some slowdown, but that doesn't mean we're not going to make films. J.J. [Abrams] is busy making [Episode] IX. We have creative entities, including [Game of Thrones creators David] Benioff and [D.B.] Weiss, who are developing sagas of their own, which we haven't been specific about. And we are just at the point where we're going to start making decisions about what comes next after J.J.'s. But I think we're going to be a little bit more careful about volume and timing. And the buck stops here on that.
Finally, some Disneyland purists are upset that there's going to be booze for sale in Star Wars Land.
We have to be careful we don't let people drink and then go on Autopia. (Laughs.)
Funny. Walt did specifically say no booze at Disneyland.
Yeah, except I think Walt had a nip or two in his apartment at night. (Laughs.) I am a big believer in tradition. This just seemed like one of those traditions that if we changed it the empire wasn't going to crumble.
A version of this story first appeared in the Sept. 20 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.