| Later this year, Disney will introduce four new channels to its flagship Disney+ streaming service — Hallowstream (seasonal), Hits and Heroes (action stories from Disney, Marvel and Stars Wars), Throwbacks (pop-culture nostalgia) and Real Life (documentaries and biopics). These streams are one part of a major push to increase the amount of time viewers spend watching Disney+. The service currently accounts for about as much TV viewing as Tubi — and far less than Netflix and Amazon. In July 2023, Disney+ and Hulu accounted for 5.6% of viewing. This past July, that fell to 4.8%. (YouTube, Netflix, Peacock and Tubi all grew their shares over that period.) After returning to Disney two years ago, CEO Bob Iger asked division heads Dana Walden, Alan Bergman and Jimmy Pitaro to fix Disney’s streaming business. Priority No. 1 was making money. While the company had built a large customer base for streaming — larger than any other legacy entertainment company — those services lost more than $4 billion in fiscal year 2022. In the last 18 months, Walden and her compatriots have stabilized Disney’s streaming business, which reported an operating profit last quarter. Now, they need to get back to adding customers — and getting existing ones to watch more. They’ve just enabled most Disney+ users to watch Hulu programs within the app, meaning you can now see new episodes of The Old Man or The Masked Singer alongside Bluey. And it will add ESPN by the end of the year. “Clearly we are in a world where we are responsible for not just delivering excellent content but technical innovation,” Walden told me. “We are experimenting in a way we previously didn’t have the flexibility to do.” Walden spoke with me by phone, having just returned from New York. Our conversation took place over two days. Disney is going to have its best night at the Emmy Awards since you arrived. What impact does that have on your business? When the entire industry gets together and determines that a handful of shows and performances and contributors are the best, it means something. Consumers are looking for help in navigating so much choice and this is one way they can know how we feel about everything being made. What lessons do you take from the success of Shogun and The Bear? Quality endures and breaks through. That’s across every category of programming. That’s a north star for Walt Disney Co., and it’s true certainly for FX. Look at the year they are having. Is The Bear a comedy or a half-hour drama? Well The Bear is competing in the comedy category. Shows can evolve from where they begin. It’s competed for two years in comedy. It started there for a reason. How do you preserve quality when you cut billions of dollars in costs? There’s so much to be optimistic about right now in the creative community. We’ve cut back, but we’ve never been an organization that chased volume. We’ve always preferred curation. Disney streaming services have lost share of TV viewing over the last year. How do you increase engagement? Programming and technology, and we’re moving forward on both fronts. Think about Hulu on Disney+. We’re moving in the right direction. We see Disney+ subscribers increasing their engagement because they are watching the Hulu content. There are shows that are only available on Hulu but branded FX. Why is that? FX is a brand that stands for quality. It’s well established. We have an extraordinary team that’s been together a long time. We worked very hard to create a brand that matters. I believe it does matter to consumers. You are now breakeven in streaming. How do you keep building so that your streaming service becomes very profitable? We are profitable and we are going to grow. Getting there was about the right mix of content, the right level of investment that satisfies subscribers, events that serve as acquisition drivers and being able to maintain that level of quality so subscribers stay engaged. Have you seen any negative impact from a really steady drumbeat of price increases? No, we have not seen meaningful churn. What share of Disney+ customers are choosing ads? Half of subscribers are choosing the ad tier. You’ve added a lot to your portfolio in the last couple years. What’s been the biggest challenge? The best part about my job is that I’ve been able to work in so many different areas of our business. Having grown up in a traditional studio, then a broadcast network, now global and domestic streaming and an international content engine … I have an incredibly exciting job. I get to work at the most creative company in the world. I would not describe it as challenges. You pretty much teed it up for me to ask about your next job at Disney. What I just told you is I have an excellent job, and I work with incredible colleagues. You went dark on Charter last year and DirecTV this year. Are you surprised people are picking fights with you? I’m not surprised that in this moment of transition that negotiations are more difficult than they were. What are the top priorities in these negotiations? Making sure that we are being compensated properly for the level of content and the type of channels and services we deliver into these partnerships. We were the foundational partners with Charter as they went about reinventing their business. That says a lot about how we’re viewed. Now we go into this new era with DirecTV as they endeavor to make adjustments to what has been their traditional business. They are going to make that shift and go into this next era with one partner first, and that’s Disney. How would you compare the dispute with DirecTV to Charter? They are only similar in that they represent a moment where their businesses needed to change and they are both embracing disruption and trying to disrupt themselves, which I admire. These are different approaches to delivering value. DirecTV highly values these packages of channels and services. When they originally came to us, it was with the goal of creating six. Where we ultimately landed was three. We wanna help them stay relevant with their customers. Those are viewers of our channels and will be subscribers to our services. Will DirecTV pay you to offer your streaming services? Yes. As part of this deal, we entered into a wholesale agreement. When you look at future of pay TV … how long do your TV networks have before viewership is too low to keep them going? The marketplace will clearly determine where that point is. We look at our entire distribution ecosystem and how can we monetize our content in a way that enables us to keep investing at the right level so our content is undeniable. We’re monitoring it very carefully. Obviously the resources we are devoting to channels which are not viewed the way they used to be is declining. And we continue to ramp up investment in places where we think viewership can grow. I would include broadcast in that bucket. I would argue Disney has the best collection of entertainment assets in the world. But it’s really hard to access them. If you want Pixar or Marvel, you go to Disney+. If you want the NFL you go to cable. For some shows, you need to go to Hulu. How are you going to make this easier for people? All that we are offering to subscribers in the form of Hulu on Disney+ and these four new streams, an ESPN tile launching in December … these are all innovations in streaming platforms that will help make it significantly easier for subscribers to find the maximum amount of our content in one place. You talked about not chasing volume but curation. Netflix has the best in class technology. But it also produces at a really high volume. Can you catch them in engagement without increasing the number of shows you make? Bob has talked about growing our volume internationally, globally. In the US, we have the right level of volume. Particularly when two platforms are viewed in one experience. Internationally, we could expand on what we’re doing in local markets. That’s something we hope to accomplish. There is a perception in the marketplace that you’ve scaled back your investment overseas. We did because we were waiting for our technology roadmap to be able to create an engagement dynamic where content will be well surfaced and meaningfully merchandised. We’ve had a lot of success in APAC. In [Latin America], we’ve had several successes on the content front. Our EMEA slate is very young. While we’ve had some success in terms of specific countries, we have not yet had that big explosive hit we anticipate having at some point. Cutting back on content was a reflection of a desire to invest in technology and then ramp back up on the slate. When you used the phrase engagement dynamic … Is that your way of saying you need a better recommendation algorithm? On tech, we have a number of goals, one of which is to have a best-in-class algorithm that is able to process long histories of viewership like Netflix does. And be very targeted in recommendations. David Zaslav had his first good week on Wall Street in a long, long time. Shares of Warner Bros. Discovery spiked almost 18% last week thanks to two pieces of news. The company struck a new deal with Charter, the largest U.S. cable provider, and Zaslav said his streaming service Max would add 6 million customers this quarter. Warner Bros. is the third major media company to do a deal with Charter, following Disney and Paramount. While Disney went dark and Paramount had to extend its talks to avoid going dark, Zaslav did his deal a year early. Customers can now get Max (aka HBO) as part of their cable bundle at no extra charge. Why would Zaslav essentially give Max away when he charges $15 for HBO and even more for Max? Charter is offering the advertising-supported version of Max — so it’s not the exact same product as HBO — and Warner Bros. Discovery is getting paid for every Charter customer, whether or not they activate the service. Zaslav is also protecting his other cable networks. Charter pays companies like Disney and Warner Bros. a certain amount of money every year. It’s still paying them about the same amount of money (a little more to the stronger players, a little less to the weaker ones). Every media company has to make trade-offs in the shrinking world of cable. They allow some of their least-popular cable networks to get kicked out of packages, ask for price increases for their most valuable networks (like ESPN) and allow cable providers to package their streaming services at a wholesale rate that is lower than what the consumer pays outside the bundle. Warner Bros.’ cable networks like TNT didn’t get crushed despite the imminent loss of the NBA. That’s a win. The best media business aroundOnlyFans generated $6.6 billion in sales last year. Most of that money – about 80% — went straight out the door to creators. OnlyFans creators made more money last year than NBA players, as Matthew Ball notes in a recent piece. Of course, there are a lot more creators than pro ballers. Even after giving creators their cut, the company generated about $1.3 billion in revenue last year, along with a pretax profit of $649 million. That means it has an operating margin of about 50%, which is insane. The company has paid its owners more than $1 billion in dividends over the last three years. Scoop: Dude Perfect hunts for a new leaderDude Perfect, the popular YouTube channel best known for trick shots and other sports stunts, is looking to hire a seasoned media executive to take over its business. The channel raised more than $100 million from the investment firm Highmount Capital earlier this year to expand its programming, live experiences and consumer products. The channel was founded in 2009 by five friends who have built an audience of more than 60 million. The No. 1 TV show on streaming is…Prison Break. The 20-year-old drama that originally aired on Fox topped Nielsen’s charts for the first two weeks in August — right after it returned to Netflix. (It was already available on Hulu.) Deals, deals, dealsI went to see Sturgill Simpson perform at the Greek Theatre in Los Angeles Saturday. He played for almost three hours. He didn’t take a single break (or change his costume). It was riveting.
I’ve heard his music here and there over the years, but this was the first time I sat and listened for a sustained period. Consider me a fan. | 
