Ex-Disney mogul on TV’s battle of the giants
Ex-Disney mogul tells how giants of television are lining up for an astronomically expensive battle with Netflix in . . .
FORMER Disney boss Michael Eisner says a major battle is looming in the world of television broadcasting. And it’s one that will see the dominance of global TV streaming giant Netflix challenged from all sides.
Eisner says a string of giant corporations, ones that could once have bought the streaming service ‘for nothing’ in the early days, are now pumping billions into taking its number one spot by force.
The battle of the giants has this year seen movie studios, technology firms and even telecoms corporations squaring off in a rivalry that leaves most UK firms looking like minnows.
Disney+ launches in November and will undercut Netflix – a firm Eisner also has links with – by almost half. It will feature a staggering 8,000 movies and television episodes, bigscreen classics to new series based on its wildly-popular Star Wars and Marvel franchises. ‘If anybody can beat Netflix, Disney can,’ says Eisner, boss from 1984 to 2005 and who still exudes Hollywood charisma.
Hostilities are already escalating and the amount of money at stake is eyewatering. The studio is taking its own content off Netflix – costing it $ 150 million (£120 million) of operating income from lost licensing fees in 2019 alone. Disney+ will soon be the only way to stream Disney movies. ‘They are spending a lot of money on keeping their products off other streaming services,’ he says.
Eisner, himself worth an estimated $1 billion, says the ‘big bet’ and short-term pain could well pay off. ‘I think they can do it. You won’t know for five years really [but] they have the best shot at doing it.
‘The only question in my mind is will they get enough subscribers worldwide to pay for all that?’
Disney expects to sign up to 90 million subscribers by the end of its 2024 financial year. According to a recent report from Mindnet Analytics, 8.7 million Netflix users are already considering the switch – still a drop in the ocean for Netflix which has 152 million subscribers worldwide.
But Disney isn’t the only competitor on its horizon. Apple and NBCUniversal are launching services. Meanwhile, telecoms giant AT& T bought Time Warner for $85 billion last year and is reportedly already in talks with Star Wars director J.J. Abrams about its own exclusive content.
Back in Britain, ITV and the BBC also say their BritBox streaming service will launch this year with a line-up of classic British box sets.
Eisner admits investors on Wall Street will have to be ‘patient’ after studios made the mistake of allowing Netflix to blindside them.
‘Several companies had the ability to buy Netflix early for nothing. Everybody agreed to sell their library to it which was probably a mistake for them but they made a lot of money on it and it kept a lot of companies afloat.’
Netflix was founded in California in 1997 and began by renting DVDs, then streaming and finally, the turning point, when it started streaming its own original content such as political drama House Of Cards. Although he is still a significant shareholder in Disney, Eisner also produces successful Netflix adult animated comedy drama BoJack Horseman. It has helped to propel Netflix to a value of $140 billion compared to Disney’s $260 billion.
Few company bosses fit the description of being a celebrity CEO better than Eisner. Over a 21-year period as Disney’s boss, he became almost as well known as Walt himself after running the company at such a vital time as well as appearances on television and friendships with superstars such as George Lucas and Steven Spielberg.
We meet the mogul in Beverly Hills, just steps from the upmarket stores of Rodeo Drive and the Wilshire Hotel, made famous by Julia Roberts and Richard Gere in 1990’s Pretty Woman.
The area is home to Eisner’s investment firm Tornante which means ‘hairpin turn’ in Italian. He saw the word on signs whilst on a cycling trip through Italy and realised it suited his new direction. Media is now only part of Eisner’s empire. Tornante owns stakes in everything from Portsmouth Football Club to online charity platform Omaze.
Eisner joined Disney in 1984 after an eight-year stint as chief execut i ve of Paramount where he launched groundbreaking movies including Saturday Night Fever, Beverly Hills Cop and Raiders Of The Lost Ark, the first Indiana Jones film. When he took over at what is affectionately known as the House of the Mouse, it was in the doldrums. Attempts to make more modern movies had led to forgettable live action films like scifi flop The Black Hole and Condorman, starring Michael Crawford.
‘Disney movies were being made but not by Disney. Lucas, Spielberg and us at Paramount were making Disney-esque movies like Raiders Of The Lost Ark,’ says the smartly- suited 77- year- old through a beaming grin. Eisner brought Disney back to its roots of hand-drawn animation yielding beloved favourites like Beauty And The Beast, Aladdin and The Lion King.
He then commissioned theme park rides based on them and merchandise so the films acted as promotion for Disney’s resorts.
Eisner capitalised on this spellbinding virtuous cycle by building two new parks in Florida and others in California, Paris and Hong Kong leading to Disney becoming the world’s most visited theme park operator with an estimated 157.3 million guests last year.
Eisner’s legacy is still casting a spell on the company through cutting-edge liveaction remakes of the classic cartoons he commissioned. Beauty And The Beast was the second-highest grossing movie of 2017 and Aladdin topped the charts in April. The Lion King became Disney’s fastest-selling liveaction remake to date when it made $531 million in its first ten days.
But he insists scale and big bucks aren’t everything in movies and television. ‘There’s a limit to how high you can raise prices and, secondly, just when you think that’s going to happen, somebody who, for example, lives in Blackpool and is 15 years old, comes up with some great new series on some BBC streaming service and all of a sudden the world goes over there.
‘There will be a moment when nobody wants to go see a Marvel movie again and I’m sure Disney knows that.’
Eisner seems as passionate about his investment in Portsmouth – a football club he found after scouring Britain for ‘a very famous team that had fallen on hard times’ that he could build back. He gushes about the team in tweets and drinks coffee from a Portsmouth FC mug.
But he says that his approach is the same whether it is for football or film. ‘It’s a strategy of excellence. The strategy of whatever you do, do it really well.’
Everyone agreed to sell their library to Netflix – which was probably a mistake