In the case of Disney’s recent board challenge, it’s rare to see so much of the inner workings of a proxy battle play out on CNBC, let alone at the center of the fully disrupted TV industry. When I was a young buck, we had to read thick paper books like Barbarians at the Gate to have so much fun.
But over the past few weeks I got to see Nelson Peltz up close.
The smart money? I don’t think so.
Oh those silly Wall Street types. The outsiders, the bankers, the analysts that call the shots from the outside with no industry experience.
They’re like Chat GPT 3, these folks.
Well I’m glad to report that Nelson Peltz lost and Bob Iger won. Experience, wisdom and strong industry leadership are here to stay.
This is a big deal. I saw first-hand how AT&T helped to take one of the top names in TV into a streaming disaster that the company has yet to recover from. And it took pricing down with it!
There are two key stories that need to be told about industry experience that directly relate to Peltz’s loss. Here are two imperatives he didn’t grok.
- Gotta have the content.
- Have to embrace & solve product complexity.
First, Bob Iger knows the content business.
And content, as we all know by now, hopefully, is King.
That means relationships with talent.
Like hiring Jimmy Pitaro.
That means making huge bets.
Like allowing Pitaro to strike an 8-year deal on January 4, 2024 that will give ESPN exclusive rights to 40 NCAA championships, including 21 women's championships and 19 men's championships.
The same one that just this past weekend had record-breaking viewership numbers - for the women’s championship game - between Iowa and South Carolina. Which drew 18.7 million viewers across ABC and ESPN, peaking at 24 million viewers.
I’m going to repeat.
A women’s basketball game. Peaking at 24 million simultaneous viewers watching.
The most-watched women's college basketball game since 1992. (And that was a televised Olympic game!)
A few months in and Pitaro’s deal looks to be a stroke of genius. Content-wise, that is.
And the split-screen headlines are dripping with irony. Peltz was wrong. The Content biz is different.
Have I made my point?
Second?
This past weekend, I held my first #FutureOfTV.Live Quarterly Zoomcast since leaving Amagi last month. (Yes – a great run, nearly three years – so many wins to share, hit me up at NAB!)
Pat Crakes of Crakes Media joined. Pat is the authority on all things Sports TV, RSNs and the just resolved Diamond / Bally Sports bankruptcy.
What Pat made clear is this:
The pay TV business has been disrupted by a series of universe-sized market forces. This has broken up the bundle and destroyed the economics of a truly stupendous business.
“The pay TV business was a textbook case of a natural monopoly. Not a monopoly, a natural monopoly. Pick-up an economics textbook. Over time, with municipal regulators as a partner in the cable business, you can generate amazing margins.
Now, the natural monopoly part of the pay TV business is over. It's still a good business, but it has none of those natural monopoly characteristics.”
He continued, “So there's a need to unlock, re-bundle, figure out multiple different ways for consumers to interact with this content while still playing nice with the old system that throws off all these economics. That's actually quite complicated.”
The tidal wave of change described above isn’t Iger’s fault.
OK bear with me. We’re almost there.
The second thing that Peltz got wrong – and what consumers everywhere get wrong – is that this is a ridiculously demanding and difficult business.
We thought streaming would standardize everything and it’s only gotten a thousand times more complex.
And if you’re Iger, your entire job is filling a complex scaffolding of Rube Goldberg machines and piping them to billions of screens at perfect price points, offerings, and viewer experiences.
Then you have to monetize them by grappling with consumer payments on the one hand and demanding advertisers on the other, all while managing perishable inventory that can spike or crater any given Sunday!
It ain’t easy being green.
But it’s not Iger’s fault.
Indeed, he’s killing it. Witness the last release of the Disney / Hulu app. Or how about Disney’s recent February earnings results?
OK, ready?
Take a peek at the headline in this slide below from Peltz proxy deck.
To me, it just screams, ‘consultants with no industry experience.’
It’s a fine table. And it lists all the products in discussion, for which they’ve tried to communicate with shareholders without giving all the secrets away to the competitors.
But the framing of this is just plain wrong. It’s not Chaotic. It may look that way to an industry outsider, or to a consumer, but the line-up of D2C products themselves – all of which are constantly evolving, well … that’s the only way.
The headline should say:
DISNEY HAS A PLAN FOR MIGRATING & MONETIZING CONSUMERS – NO MATTER WHERE THEY ARE ON THE VX JOURNEY.
And then – of course – I’d put a nice big column to the right of the red one, which I would label “Ongoing exogenous industry risks” And I’d put another column to the right of the Risks column. It would be green.
I’d emphasize a basket of woven tactics – none of which are commonly executed today – that can pull viewers up and down the funnel. Freemium TV with lots of options.
It would be filled with things like:
- Workflows from Influencers to Social to TV to web to App
- Geographical customization of apps and EPGs
- QR codes to drive TV to phone interactions
- Apple Pay & Bitcoin integration for frictionless micropayments
- Integrations of the Parks into the influencer arenas
- Gen AI content creation workflows to extend view durations & enhance channel branding
- Additional content security investments to protect IP, including stealing IP for Gen AI training
Would love to hear your feedback on the list. What’s missing?
Our industry has been through a lot.
YouTube disruption, Netflix disruption, Social media, Randall Stankey’s tanking of DIRECTV, the advent of mobile phones and the growth of video games – all of this has happened over many years & all at once.
When you look across the history of the media business, you can’t find many better industry stewards than Bob Iger, in my view. Sure, succession didn’t go as planned but let’s blame Chapek, shall we? And the FOX RSNs acquisition was expensive. But not a catastrophe.
Iger’s future? If he can set the business on the best path to sort consumers into various buckets and achieving dynamic and sophisticated pricing strategies as a result. My life’s work has been innovating in TV to build a win-win for customers and our industry and I know first-hand how important industry leadership is. I’m glad Iger’s at the helm and I wish him all the best.
Subscribe to my free #FutureOfTV.Live Quarterly and you’ll have access to my quarterly proprietary TV surveys, zoomcasts & email notes.
Brian Ring is Principal Analyst at Ring Digital llc, a consultancy that leverages video tech expertise, proprietary TV surveys & twenty years of industry experience to help clients navigate the future of TV across all business models, geographies, genres, and platforms.
We serve SaaS vendors, FAST channel publishers, CTV & OTT platform providers and other stakeholders in the TV tech ecosystem with: Executive facilitations; M&A & business strategy; strategic sales development; and Go-To-Market execution including demand gen, product marketing & content strategy.
Background includes: Amagi, Brightcove, Synamedia, MediaKind, ATEME, Haivision, Pac-12, Univision, StatsPerform, Verizon & others.
Learn more: www.RingDigital.tv
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by StreamTV Insider staff. They do not represent the opinions of StreamTV Insider.