In a recent revelation at the MoffettNathanson Media and Communications Summit, Disney’s CEO Bob Iger underscored the pivotal role of technology in making the company’s streaming services profitable. Iger stated, “Now what we really need to do is invest in technology to serve the user because it’s very, very clear that in order for us to turn streaming into a profitable business, it has to have a user-first mentality.” This indication points to a strategic shift for Disney, aiming to enhance its user experience through advanced tech implementations.

Disney’s streaming operations, which include Disney+, Hulu, and ESPN+, showed impressive performance in the second quarter with just an $18 million operating loss—bringing Disney+ and Hulu’s entertainment streaming to a $47 million operating income. Despite not yet being wholly profitable, these figures reflect a significant stride forward.

Highlighting one of Disney’s key competitors, Iger mentioned that Netflix sets the “gold standard” for streaming technology. According to Iger, Disney must parallel Netflix’s technological capabilities, focusing on creating highly personalized and dynamic experiences that keep users engaged.

Marketing costs for Disney’s streaming sector were spotlighted as “too high” due to the lack of advanced algorithms and customized marketing strategies. The company’s focus on tailored subscriber communication is seen as fundamental to reducing churn rates, enhancing user engagement, and minimizing cancellations.

Another interesting point Iger noted was the planned integration of Hulu and ESPN+ into Disney+ to bolster user engagement further. In addition, Disney+ will embark on a password-sharing crackdown starting in June in select markets, an initiative expected to align with Netflix’s similar measures launched last year.

What are your thoughts on Disney’s strategic focus on technology to enhance its streaming services? Do you think it can match Netflix’s benchmark? Share your opinions in the comments below and don’t forget to share this story with your friends!

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