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BloombergBusinessweek November 11, 2019

L

ongbeforehebecamechiefexecutiveofficerof

WaltDisneyCo.in2005,RobertIgerdeveloped

a habitofwakinguponweekdaysat4:15a.m.

andworkingout.Latelyhe’sbeengettingup

aroundthathouronweekends,too,toexercise

andwatchearlyversionsofhisstudios’mov-

iesandtelevisionshows.He’sbeenobsessingoverthefirst

seasonofTheMandalorian, a spacewesternfromtheStar

Warsuniversecreatedbyactor-directorJonFavreau.The

showis abouta bountyhunterwhosearmorbearsa distinct

resemblancetothatofBobaFett,whocapturedHanSoloin

TheEmpireStrikesBack.

“I’veprobablyseeneachepisodeofTheMandalorianthree

times,”Igersays.“First,togivesomenotes.Second,toseethe

roughcutandtheimpactofthenotes.Andnow,justrecently,

I watchedallthefinalcutssothatI couldbeblownawayby

howit looks.”Disneyis spendingmorethan$100millionon

theshow,soit hadbetterbevisuallystunningandthensome.

If youwanttoseeTheMandalorian, you’llhavetosignup

forDisney+,whichlaunchesonNov.12.Disneyhasprom-

isedthefamily-focusedstreamingservicewillfeatureatleast

25 newTVshowsand 10 newmoviesinitsfirstyear,along

witha hugearchiveencompassingeverythingfromMickey

Mouse’sfirstappearance,in1928’sSteamboatWillie, tothe

contemporaryadventuresofTheAvengerstotheinterstellar

StarWarscanon.It’sthemostimportantproductlaunchin

Iger’s 15 yearsasCEO.

It’salsotheriskiest.Igerbuilthisreputationwith10-figure

purchasesthatturnedDisneyintoHollywood’smostsuccess-

fulmoviecompany:Pixarin2006,Marvelin2009,Lucasfilm

in2012.Thisyear,hecementedDisney’shegemonybyspend-

ing$71billiontobuymuchof21stCenturyFox.Butforallits

productionmight,Disneydoesn’thavea deeptechnology

backgroundlikeitsprimarystreamingcompetitorsAmazon,

Netflix,andApple,whichintroduceditsownserviceon

Nov.1. Andunlikethesecompanies,it haslittleexperience

sellingproductionsdirectlytoconsumers.Untilrecently,if

youwantedtowatchtheDisneyChannelorESPN,youhad

tobuya cablesubscription.If youwantedtoseea first-run

Avengersfilm,youhadtogotoa movietheater.Andif you

wantedtocatchit online,yousubscribedtoNetflix.

NowDisneyhasthepipes,too,thankstoits$2.6billion

purchaseofa controllingstakeinNewYork-basedstreaming-

technologycompanyBAMTech.Andit’smadea bigbetthat

notonlycanitstechnologymatchitscompetitors’,it can

overwhelmthemonprice,witha monthlyfeeof$6.99,well

belowNetflix’sstandard$12.99.Disneywillalsospend$1bil-

liononnewshowsandfilmsnextyear—afigurethatwill

soondouble. Marvel’s offerings will include one based on

Loki, the adopted brother and sometime nemesis of The

Avengers’ Thor. Pixar’s will include Monsters at Work, fea-

turing Monsters, Inc.’s Mike and Sulley, voiced by Billy Crystal

and John Goodman, respectively.

Before Disney revealed the first details of its productions to

Wall Street analysts in April, investors had reason to be skeptical

ofthecompany’sstreamingambitions.Itsyear-oldsports

service,ESPN+,had2 millionsubscribersbutnoprofits,while

Hulu,whichDisneytookcontrolofinitsFoxdeal,hadmore

than 25 millionU.S.subscribersbutwashemorrhaging cash.

When it rolled out its new fare, complete with footage, though,

“there were two audible gasps,” says Jessica Reif Ehrlich, a

media analyst with Bank of America Merrill Lynch. “One was

when they announced the price, which is way lower than any-

one expected, but also when Jon Favreau showed the clip from

The Mandalorian. Every guy in the room went crazy.” The next

day, Disney’s share price leapt more than 13%.

The consensus now is that Disney+ will easily meet its hopes

for 90 million subscribers globally by 2024, and that ESPN+

and Hulu will add to their totals, bringing the company to as

many as 160 million streaming customers. That’s not quite in

the realm of Netflix, which is expected to have up to 300 mil-

lion by then, but a very good start. Iger often proclaims that

Disney isn’t competing with Netflix Inc. Others aren’t so sure.

“I actually do think he’s gunning for Netflix,” says Michael

Pachter, an analyst at Wedbush Securities. “I think he wants

to be bigger than that.”

Disney’s surging stock price can be read as an endorsement

of Iger himself. Some of his spending initiallyraisedeyebrows,

but the strategy—basically, Disney is corneringthemarketon

the most valuable entertainment characteruniverses—has

PHOTOGRAPH BY JUCO FOR BLOOMBERG BUSINESSWEEK; PREVIOUS SPREAD: ILLUSTRATION BY CHRIS NOSENZO