Disney CEO says Disney+ will cut marketing spending to achieve profitability

Disney Chief Executive Bob Iger said on Wednesday (15th) that marketing expenses for the Disney+ streaming service are too high and the company hopes to make the business profitable before the end of this fiscal year, so it will cut marketing expenses.

Disney Chief Executive Bob Iger said on Wednesday (15th) that marketing expenses for the Disney+ streaming service were too high and that the company would cut marketing expenses as it hopes to make the business profitable before the end of this fiscal year.
Iger told a media investment conference hosted by Moffett Nathanson on Wednesday that Disney will invest in technology to retain customers who may be ready to churn and send them highly customized messages.
He believes that Netflix (NFLX-US) is \”very good\” at showing interesting programming to users who have stopped using a platform.
The world\’s largest entertainment company, which has focused on subscriber growth for years since launching its Disney+ service in 2019, is now cutting costs to break even.
Iger said Disney expects future profit margins in its direct-to-consumer streaming business, including Hulu and ESPN+, to be in the double digits but declined to give a specific time frame.
Disney\’s earnings report earlier this month showed that its streaming unit\’s second-quarter losses narrowed to $18 million from $659 million in the same period last year.
Despite this, the stock price fell the most in a year and a half after the earnings report was released.
Disney was tepid about its streaming subscriber growth prospects this season and said it expected theme park attendance to slow from post-COVID-19 peak levels.
Iger said at an investment conference on Wednesday that the Disneyland business is \”growing well\” in the long term but reiterated that the unit\’s double-digit growth in recent years will not be sustained.
Iger said Disney also recently received city approval to expand its original Disneyland resort in California.
The park was making about $100 million a year in profits when Iger became CEO in 2005; today profits are \”well over $1 billion.\”
Disney\’s (DIS-US) stock price fell 3.57% in early trading at the time of writing, temporarily trading at $101.59 per share.

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