Robert A. Iger
Chairman and CEO, The Walt Disney Company
Excerpt from remarks to Boston College Chief Executives Club
October 5, 2016
TAKEAWAY: Consumer Access
Technology has changed the world as we know it, and with so much disruption going on, how do you lead a company like Disney—what’s the role of OTT? Do you consider the acquisition—it's been reported—of Twitter and Netflix because of this changing environment? How do you view that whole area?
I wanted the company to embrace technology more aggressively—you mentioned it earlier—as a core strategy of the company when I became CEO, because I thought it was inevitable that technology was going to disrupt our businesses, and that if we tried to fight it off or slow it down or do anything that was aimed at deterring its impact on our business, we were going to lose that battle. So what I tried to do is position the company as a company that not only embraced technology, but viewed it as an opportunity as opposed to just a threat, even though it’s very easy to look at it today, given its disruptive force, particularly on media, as only a threat.
It's imperative, though, that we embrace it not only because of its inevitability and the fact that it's changing us so much, but because it's where the consumer is today. On the media side—you mentioned OTT, which is short for over-the-top television. Over-the-top television is basically getting TV, usually Internet-provided, without having to go through a cable or a satellite box. That's what over-the-top TV is. Not only is it, in a way, more direct, but it typically uses the user interface deployed in Internet or web-based or app-based experiences.
If you look at the world today in terms of the consumer, technology is driving not only what people watch, but when they watch it, where they watch it, how they watch, what they pay for things. There’s been a huge change in authority from the distributor and the creator of content to the user of content. One, they have much more choice, and with choice, I think, comes a little bit more authority. But these technology tools are giving the consumer an ability to pick and choose and even price in a much more consumer-centric manner. So you have to embrace it, because it’s not going away.
In our case, we use it obviously to make our product better. The culture of Disney emanates from Walt Disney's day, where he believed that technology, by making the product that you make higher in quality, will improve consumption. So he did things like multiplane cameras which gave him the ability to paint backgrounds in animation in the '30s, '40s, and '50s in more robust ways, all the way through to what he brought to the modern theme park, Disneyland, with Audio-Animatronics and robots that talked and looked real. And guest satisfaction or user satisfaction was higher. So that’s a must. We spend a lot of money on that.
But I think the biggest thing that we’re trying to do now is figure out what technology's role is in distributing the great content that we have. Because it's one thing to be as fortunate as we are to have Disney and ABC and ESPN and Pixar and Marvel and Star Wars or Lucasfilm—fantastic. But in today’s world, it’s almost not enough to have all that stuff unless you have access to your consumer, who, because of technology, is providing you with incredible data, to provide the consumer with a more customized, personalized experience, and to basically monetize the whole thing better.
So what we're thinking about a lot is what role does technology have in distributing our content from us directly to the consumer? How must we invest in that? The only large investment that we've made in that space is by taking a 33% interest in a Major League Baseball property called BAM Tech, which delivers Major League Baseball over the top to its fans. We invested in that with a path to control, because we want to get more involved in distributing, as well.
I obviously won't comment on potential acquisitions. That should not mean that we're either doing anything or we're not doing anything. But when you mention Netflix and Twitter and Facebook and a variety of other—Amazon, Apple, new entrants into the marketplace—you see companies that are not only technology companies or distributing content more, but are starting to invest more and more in making content. Twitter licensing the NFL is an example of that. Amazon making movies and TV shows. Netflix is obviously doing the same. Apple's starting to invest somewhat in that direction. So the whole world is changing. And for a company like ours, I think the most important thing is to adapt to the changes that are going on and make sure that even with the great hand we have, that that hand does not become either less value or less relevant in a world that’s so dynamic.