The Controversial Decision Disney’s CEO Just Made
Disney has dealt with its fair share of contention as of late, adding to that was a recent decision made by CEO Bob Chapek.
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Disney’s new CEO has tried to distance himself from his predecessor, Bob Iger. Iger resigned back in February 2020, which surprised many people at the company. He propped up the front-runner for the job, Bob Chapek, who swiftly took the position after Iger’s departure. Now, the two are at odds; with differing political opinions, Disney is at war with its faltering cultural relevancy and streaming service cost increases.
One of Chapek’s recent decisions was to increase the Disney+ subscription price. The price increased from $7.99 to $10.99 a month, alongside a new subscription option of $7.99 a month with ads. This widely differs from Iger’s financial strategy, which focused on keeping the subscription service affordable for its devoted followers. But now, with inflation at record-high heights, many businesses have struggled to maintain their customers. Unfortunately, a price increase aligns with the current market’s economic turbulence.
Now, Disney+ subscription services with ads are more expensive than its competitors. NBC’s Peacock is only $4.99 with ads, as well as Paramount+, which is also priced at $4.99 with ads. The $10.99 price for no-ad streaming is currently higher than HBO Max, which is one dollar less, and Amazon Prime, which is $8.99 per month. This conflicts with former CEO Bob Iger’s business plan, which wanted to keep Disney+ at a reasonable rate. These opposing business plans may be the reason for the rising tension between Bob Iger and Bob Chapek.
Chapek doubled down on his subscription service increase choice, stating that Disney+’s content reflects the heightened price. He referred to the increase as “extremely compelling” since the company continues to “invest handsomely” in the content it produces. The upcoming content for Disney that’s been funded excessively is Chapek’s primary reason for the price inflation. If the new CEO doesn’t follow through with exceptional content, Disney fans may be highly dissatisfied by the unnecessary subscription service increase.
Iger was outwardly vocal about his dissatisfaction with Chapek’s business model. Iger’s CEO model was to slowly raise subscription costs over time, looking at a one-dollar increase yearly. Iger followed through with this plan, raising Disney+ subscriptions by one dollar from $6.99 to $7.99. Instead, Chapek decided to raise the price for Disney+ by three whole dollars, which caused a stir in the fan base. Though no one likes the cost of their subscription service to go up, a three-dollar increase is far more noticeable than a one-dollar raise. Now, the former CEO is worried about Disney’s future as a streaming platform and content generator.
Due to the commotion of Disney+’s subscription changes, Chapek has slashed its 2024 subscriber outlook. In 2020, Chapek believed that Disney+ would have more than 260 million subscribers by the end of 2024. But with viewers dropping for every streaming service worldwide, Chapek reduced that figure to between 215 million to 245 million subscribers.
Disney is one of the most iconic media companies on the planet. But with inner tumult stirring up drama between past and present CEOs, the streaming service may be in danger. Without a better financial model, Disney+ could become too expensive for its loyal customer base.
