The Walt Disney Company (DIS) Goldman Sachs Communacopia + Technology Conference 2022 Transcript

Sep. 14, 2022 9:55 PM ETThe Walt Disney Company (DIS)
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The Walt Disney Company (NYSE:DIS) Goldman Sachs Communacopia + Technology Conference 2022 Call September 14, 2022 5:00 PM ET

Company Participants

Bob Chapek - Chief Executive Officer

Conference Call Participants

Brett Feldman - Goldman Sachs

Brett Feldman

Alright. Well, welcome, everybody. This is a very exciting session for me. It’s a great pleasure to welcome in person for the first time ever to our Communacopia + Technology Conference, Bob Chapek, the CEO of The Walt Disney Company. Bob, thank you so much for being here.

Bob Chapek

Thank you. Thanks for having me.

Brett Feldman

Alright. I think you have to go through your Safe Harbor really quickly. So let’s jump into it.

Bob Chapek

Yes. The lawyers gave me a tremendous statement to read. So certain statements today, including statements about our plans, beliefs, expectations, guidance or business prospects or other statements that are not historical in nature, may constitute forward-looking statements under security laws. We make these statements on the basis of our current views and assumptions regarding the future and do not undertake any obligation to update them. Forward-looking statements are subject to a number of risks and uncertainties. Actual results may differ materially from the results expressed or implied in light of a variety of factors, including factors including our Form 10-K and our filings with the SEC as well as the legend you see here and on our IR website. Thank you for your patience.

Brett Feldman

You are nothing if not compliant. That is the first we have ever had a round of applause with the Safe Harbor language, so...

Bob Chapek

They wouldn’t let me include my joke. I had a joke sort of integrated in there and the lawyer said, no. So I try to make it fun, sorry.

Question-and-Answer Session

Q - Brett Feldman

Well, there is a lot of fun stuff to talk about here. So listen, Disney is about to wrap up a fiscal year that has seen its streaming business overpass 200 million subscribers. Your Parks business is now putting up financials that are better than what we saw before the pandemic. And so as you look ahead into fiscal 2023, what do you see as Disney’s biggest opportunities and how are you factoring in the current macro environment?

Bob Chapek

I would say the first thing is, obviously, we want to keep the great quarterly operating performance up and continue to exceed expectations, but the way that we do that at The Walt Disney Company is through extraordinary content. And any of you who had seen some of the coverage coming out of our D23 fan convention this last weekend know that we have an embarrassment of riches in terms of the plethora of wonderful content that we have coming from all of our creative engines. And so we are really excited about what’s to come to keep fueling that great operating performance. At the same time, we realize we are at an inflection point. Next year starts our 100th anniversary of The Walt Disney Company, believe it or not and that gives us the ability to have a strategic accelerant, pivot, catalyst, whatever you want to call it, towards next generation storytelling that takes the great storytelling capabilities as a company that we have and sort of supercharge them, if you will and use them to tell different types of stories aided by technology, all to cater to our broad diverse group of consumers across the world.

Brett Feldman

Alright. I’d start off by talking a bit about your direct-to-consumer segment. You said that you expect to reach between 135 million to 165 million core Disney+ subscribers by the end of your fiscal ‘24 and that Disney+ as a service will achieve profitability the same year. Where do you believe the service is most under-penetrated and what gives you confidence that you can not only hit your subscriber targets but also your profitability targets?

Bob Chapek

We look at each constituent of fandom within Disney+. And the good news is, is that we still see headroom regardless of how a fan self describes themselves as being primarily a Pixar, a Lucas, a Disney. However they define themselves, we see that they still have headroom. By headroom, I mean how many people intend to subscribe versus how many people actually have subscribed. So we know in our core franchises, we are not even close to done. But the biggest opportunity, to answer your question directly, that we see in terms of an opportunity is the general entertainment area. And I think people say, really, for Disney, I think it’s only natural if you’ve got some young kids and you put them to bed at 8 o’clock at night and you’ve just finished watching Dumbo, chances are the parents aren’t going to want to watch Pinocchio right after that. And so our fans are broad in terms of their taste. And we are lucky in The Walt Disney Company that we’ve got plenty of general entertainment to enable that. It’s just sort of in one particular area right now and that could change over time. But in terms of our confidence, we have got not only the great, vibrant, creative engines all humming, as I had communicated a little bit earlier in the opening question, but we have also got an ad service that’s coming, which is going to enable us to really cater to diverse consumer needs. And given the success of our advertising subscription business on the Hulu side, we are expecting great things on Disney+.

Brett Feldman

Well, let’s talk a little bit about the ad-supported product. So on December 8, you are going to be launching that on Disney+ in the U.S. and you sort of touched on it. How important is this product to achieving those long-term streaming subscriber targets?

Bob Chapek

Well, I mean we are looking at our business not only from a target standpoint from sub ads, but we are also looking at it from an operating income standpoint. And we expect that our ad-driven business will be margin-neutral at worst to the full price non-ad version. Therefore, it’s somewhat indifferent in terms of which – how you break up our subs. But certainly, our plans, let’s just say, were much less baked on the advertising side when we gave the sub guidance. So, I think this just puts wind in our sales in terms of being able to achieve the numbers that we stated. And given our success in the ad business on the Hulu side and the considerable ARPU impact that, that has I think it’s going to aid not only getting the actual sub-goal itself, but also hitting that operating income target. So we are very optimistic.

Brett Feldman

I think some people were a little surprised that you launched it at the same price point you currently have in the market. What gave you confidence that coming out with ad-supported product that, that price was the right way to go?

Bob Chapek

How we understand our price value proposition with consumer, as I think everybody in the room would probably acknowledge, the launch of Disney+ at that introductory price was pretty absurd. It was so attractive to the consumer. And what have we done since then? We have continually invested and reinvested and taken up our investment and taken up our investment again. So, the value proposition to our customers is extraordinary. I think we have a lot of room on the price value range. And I think we believe that our churn implications of taking up the price even in the big chunks that we are doing it is going to be negligible.

Brett Feldman

Okay. I want to come back to the pricing in just a minute, but we were talking about your long-term subscriber targets. In addition to that core subscriber target, you continue to see the opportunity to reach up to 80 million Disney+ Hotstar subscribers by fiscal ‘24 as well and that’s even without streaming rights to the IPL, although you have actually added some additional cricket rights in India with the ICC. And so a question that we get and it’s a question I have for you is where does India fit into your long-term streaming strategy?

Bob Chapek

A lot of companies have tried and failed in India and we have actually had a lot of success both on our linear business and in terms of generating subs for Hotstar. So, we certainly don’t take that lightly. It’s a big growth market as you know. A lot of companies have had challenges trying to be successful there. And I have to say I am really proud of our team and what they orchestrated on the cricket rights, because our hope is they come for cricket, but they stay for Disney. And I think what you are going to find is we did a surgical plan to try to get the linear rights, right, through IPL knowing that the market got a little too frothy for us on the digital rights, but then we came back and got the ICC digital rights, which were not as frothy and a much better value for our shareholders and then kind of spun off the excess linear rights, because we already got that from the IPL. So I think it’s a great example of us trying to seek value different ways not to say on, off or yes or no. But what we do, the extent that we go to try to orchestrate a scenario, that’s going to be accretive for our shareholders and enable us to still play the growth game in that particular market. So we are still bullish about India.

Brett Feldman

Alright. So I do want to come back to pricing. We talked about the launch of the ad-free tier at the current price. Following that launch or really in conjunction with that launch, you are going to be implementing a price increase for subscribers who prefer to remain on the ad for each year. It’s about a 38% increase, I think. And that’s pretty in line with some of the other pricing adjustments you have made or announced that you intend to make on your other streaming services. We spend so much time talking to clients about what they perceive to be increased competitive intensity in the streaming market. So with that backdrop, what gives you confidence that you are going to be able to flow through? It sounds like your preliminary view is that the churn impact is not going to be that big. And maybe just as an extension of that answer, your general thought process around raising price over time?

Bob Chapek

Again, I think it’s what the market will bear, which is a direct reflection of price value. And I think we are way underpriced relative to the value that we provide. Therefore, we owe it to our shareholders to try to get that recognized. And obviously, we have lots of data, whether it’s what we’ve just announced a few months ago on ESPN and sort of looking at what happened there. It’s our own consumer data in terms of what consumers’ intentions are, our own churn data. And I think suffice it to say that we think we made the right move and we are still in some cases significantly under where our competitors are, which again speaks to that introductory price that we came out at. And so I don’t think if we came out at a more moderate price to start with, people would be looking at where we are at now and say, oh my gosh, you took such a big price increase. It’s only relative to where we started, but I think everyone recognizes that, that’s a tremendous value. And it helped us get to where we are at in terms of those huge sub numbers. I mean it’s hard to believe we have only been at this 3 years and we have gotten to the point where we are at. But that said, I think we’ve got a long way to go still.

Brett Feldman

Okay. Well, let’s spend some time talking about your content strategy. And you continue to take a one-service-does-not-fit-all approach to streaming in most of your markets, I think most notably in the U.S., where you have three streaming services that can be purchased a-la-carte or in a discounted bundle. Why have you sustained this approach when your largest competitors are increasingly focused on an all-inclusive service profile?

Bob Chapek

Well, we still have the ability for consumers to bundle. It’s a soft bundle, as you know. And as you can see through our pricing moves, we encourage – when we took the price up, we encourage people to go to that bundle. Why, because the churn is so extraordinarily low in that bundle. So that’s a good value proposition for them, plus it’s beneficial to us. So, it’s really a win win win, if you will. At the same time, we also know that there is going to be an opportunity at some point in ‘24 specifically to – because of the put/call arrangement we have on Hulu, to reconsider the way that we go to market. Now some of you may have noticed in Europe, Disney+ has a six brand tile called Star, which includes our general entertainment from a company there. And so we’ve got – we’re going to have a lot of experience in integrating Disney general entertainment into a sort of Disney+ one integrated, what I would call, right, a hard bundle. It’s a hard bundle. And so we are all about consumer choice and personalization. So we want to give the consumer choice. And whether we offer something that’s a hard bundle going forward in the future when we have the ability to do that, whether we do a soft bundle or some combination of a la carte and hard bundle or a la carte and soft bundle, we will maximize the consumer choice because we believe that benefits us and benefits our shareholders.

Brett Feldman

Well, initially, when you talk about the Star example in Europe, one of the advantages to those consumers is it’s all literally in one place versus when you buy the bundle in the U.S., you sort of have to know in advance. What have you seen in terms of consumer engagement or behavior when they have the single point of entry versus they haven’t figured it out?

Bob Chapek

Well, I have to tell you, the thing that you worry about when your Disney is sort of a brand friction with some of the content that we might have in a general entertainment, and I am amazed every day in this job how elastic the Disney brand is. And I would tell you that we have had no blowback whatsoever in terms of including that general entertainment content on a Disney-branded streaming proposition, which I’m not saying it would be received exactly the same in the U.S., but I think that gives us some reason to believe that we have more degrees of freedom than anybody would have ever suspected to put general entertainment on a Disney banner and still not have it be subject to organ rejection by the consumer.

Brett Feldman

Just coming back to Hulu, you pointed out that the option to buy in Comcast once their stake kicks in, in 2024. Would you consider a quicker resolution? And do you need to have full ownership of Hulu in order to more fully integrate the service with Disney+?

Bob Chapek

I do believe that we’d have to have full ownership of Hulu to integrate it into Disney+. We would love to get to the end point earlier, but that obviously takes some level of propensity for the other party to have reasonable terms for us to get there. And if we could get there, I would be more than happy to try to facilitate that.

Brett Feldman

And are you confident you can continue to execute the strategy if the products were to have to remain separate up until 2024?

Bob Chapek

Yes. 2024 is not that far away, first of all, and I mean look at the success of our soft bundle. So we’re kind of doing it anyway. But you’re right, there is a little bit of consumer friction there in terms of having to go out of one app and into another. So I think we – long-term, we can avoid that. But yes, 2024 is not that far away.

Brett Feldman

So there is been recent news articles that have suggested that you have plans to offer a membership program that would package streaming, parks and shopping together for consumers. Is there anything you can tell us about that?

Bob Chapek

Well, The Walt Disney Company only has two business units right now. We used to have, I think, five, physical and media. And as simple as that is now for us and requiring less and less going over the transom to have synergies and collaboration inside the company, the way the consumer looks at it, it’s one entity. And interestingly enough, we’ve taken 5 databases down to two. But if we can have a universal guest experience, recognize that a person who spent 7 days in the park, 24 hours a day, and we know all that information about them, is the exact same person who watches XYZ on Disney+, and we can identify that person to the same one, and they give us the ability to go ahead and use the data that way, we can now customize and personalize an experience way beyond anything we’ve ever been able to do before, bringing now the two pieces of The Walt Disney Company into one for one common guest experience. That will give us a competitive advantage because who else has got the physical – deep physical data that you get on somebody if they spend 7 days with you, and they essentially live with you for a week? And then how does that affect what they see on Disney+? So Disney+ will be conscious of what you do in a park and will then feed you information, not on people that look like you in terms of viewing habits, people that watch this, watch that, therefore, we will feed you this. We will do it specifically on what you did during your 7 days and vice-versa. What you watch on Disney+ then will have an impact on your guest experience at the park. And I think that’s going to put us in a tremendous position of competitive advantage.

Brett Feldman

So it sounds like the goal you’re working towards is to have Disney+ effectively become that single point of engagement with a Disney fan. Whether they are a fan of your content, a fan of your experiences, a fan of your products, that’s really what you’re striving towards.

Bob Chapek

It will become a platform for consumer engagement with The Walt Disney Company, not just a movie service platform.

Brett Feldman

Okay. But within your entertainment services, there is another service at least in the U.S. that’s part of the bundle, but it’s not fully integrated. It’s ESPN – ESPN+. And you’ve said in the past that it’s not a question of when – it’s a question of when, not a question of if ESPN will go a la carte, meaning that the streaming service would be available outside the pay TV bundle. What factors are you monitoring to assess when it would make sense to implement this transition? And what gives you confidence it can be done in a way that’s accretive to Disney?

Bob Chapek

Well, our whole approach is to sort of proactively prepare for that moment without prematurely disrupting and unnecessarily disrupting sort of the business that is what it is today. I mean everybody knows that the – sort of the cable bundle is deteriorating over time. And we’re preparing for the moment that the consumer tells us that they are ready for such a step. That said, we’ve got tremendous abilities to read the marketplace and understand when it might be time to do that. Obviously, there are significant benefits to The Walt Disney Company right now for us to maintain in the cable business. It’s still a significant business, very appreciative from a cash flow standpoint for us. But at some point, we see the writing on the wall where this is going, and we’re preparing for that. But we’re not going to do anything rash or harsh, and we’re going to follow the consumer.

Brett Feldman

So I guess I got a couple of follow-up questions on that. The first would be there is obviously been a big debate around – recent debate around whether ESPN really fits in to the company long-term. You have said you think it does. So I was hoping you can maybe expand on that, and maybe as a part of that answer, talk a bit about how you think sports gambling fits into ESPN’s future?

Bob Chapek

Yes. Well, The Walt Disney Company adds a lot to ESPN, and ESPN adds a lot into The Walt Disney Company. And you can look at it something as simple as the soft bundle, but you can also look at the tremendous benefits that live sports brings to the company, whether it’s from an advertising standpoint or from an audience standpoint or from a fandom standpoint. And we think that’s very important. We think that The Walt Disney Company is a place where ESPN can be maximized relative to possibly anywhere else – that asset sitting anywhere else. And as such, we’ve been with pretty staunch supporters despite the tremendous market demand for us to sell it or spin it or there is a lot of people that are interested in getting a piece of ESPN, but we like our own hand. We like how it sits. We like our long-term strategic plan. And we’re confident that the best place for ESPN is within The Walt Disney Company.

Brett Feldman

Okay. And then the gambling side of that?

Bob Chapek

Yes. That is – the sports gambling site is one piece of the proposition as to why we think this is a good long-term, I’ll say, bet for The Walt Disney Company. It’s – there are several long-term initiatives that we’re looking at that really make this a great proposition to sort of counter some of the headwinds that we have from a cable universe shrinkage standpoint, but sports betting is certainly one of those propositions. And we’ve been looking at this for quite a long time. And I guess much like the general entertainment inside Disney+, we look at data and research all the time. And our data is undeniable. It – putting a link out, for example, which would probably be the most likely application – a link out, not app as an app, but application, a link out to a sports betting site, ESPN-branded, would have no impact on brand equity for Disney but will have a very positive impact on the brand equity for ESPN because our younger audience is demanding that. And you talked about friction. It’s the same thing. How do you eliminate that friction? Do you have to have four screens going on at once? Or is one ESPN experience that? So we’re pretty bullish on that, but it’s really one of many things that we’re entertaining to maximize ESPN’s value – shareholder value within The Walt Disney Company.

Brett Feldman

And you noted the ESPN+ right now is sort of available in that soft bundle, the Disney bundle of services. When you reach that point where it makes sense to take the full ESPN experience a la carte, would you look to make that available inside of Disney+ the same way you want Disney+ to be that point of entry to everything else Disney?

Bob Chapek

We’ve not crossed that bridge yet. Obviously, we like the idea of eliminating friction. But in terms of overlap we see, as I mentioned earlier, there is a huge overlap between Disney+ fans and wanting general entertainment. And obviously, there is some overlap between Disney+ fans and ESPN+ fans, but I don’t know that we would ever go that far, but who knows?

Brett Feldman

Okay. Just thinking about sports more broadly, you have been increasingly selective in pursuing or renewing sports rights. I mean just recently, you walked away from renewing the streaming rights to the IPL in India, as you noted before. You also did not renew the Big Ten college football rights that you had. As the value of sports rights continue to escalate, how do you assess whether they should be part of your portfolio?

Bob Chapek

Well, our ultimate filter is shareholder value. If it’s accretive to shareholder value, then we do it. If it’s not, then we don’t do it. Obviously, you have to have critical mass. But with the wealth and the plethora of sports rights that we have, whether it’s professional or college or things like Formula 1 or combat sports, we are very well positioned to have a – be well past the critical mass point and be able to blend that into a most respected and trusted brand and sports promise that we have on ESPN. So, we are nowhere near anywhere where we can’t say no and be pretty darn confident we are in good shape. And that’s where exactly where we want to be. And we are proud of our sports assets that we have got rights to and believe that, that ultimately is the power of ESPN.

Brett Feldman

Okay. The domestic box office has shown a pretty strong recovery over the past year, and several Disney titles have led the way. But box-office receipts are still below pre-pandemic levels, and there increasingly seems to be a big performance gap between the big franchise films that you are excellent at and really everything else. How have these trends influenced your view on Disney’s film strategy, including your assessment of how to best exploit this theatrical window versus your streaming platforms?

Bob Chapek

Well, as you know, we did a reorganization about 2.5 years ago that turned out to be fairly prophetic, I believe in terms of preparing for this day when distribution decisions are much more complicated. And we love the theatrical exhibition window. We love linear television network, television with ABC, but we also realize that not every bit of content is going to be best suited for that. And some will be best suited for the old legacy first channels of distribution with a shortly quick window back and forth. And we are doing a lot of work to essentially maximize that with professionals that are well equipped to do that type of work. We have had, as you said, some success, and we are getting the blockbusters to return. We like that, particularly on the Marvel business and the Star Wars business and some of the big blockbusters that we have got coming up, knock on wood, Avatar, The Little Mermaid film. And we believe those are really best served first by taking advantage of the enormous market that wants to see that kind of film in theaters. But we also realize that the days of needing to sort of sit on that film then for six months, and before it comes out to the subsequent distribution channels is kind of an old archaic model. And so within a relatively short period of time, we move those over to the streaming services and we get a win-win. It helps in the marketing because the first window acts as a marketing vehicle for the second if they are relatively short. And it also is red hot when it goes to the streaming services. That doesn’t mean there is not going to be some content. Some titles go directly to the streaming services, if that’s their best use. So, we talked very beginning – very early in the pandemic about flexibility. We are still practicing flexibility, flexibility in terms of determination of the optimal distribution channels and flexibility because we are reading what’s happening in the marketplace, whether it be the theatrical business not quite coming back outside of theatrical blockbusters or it’s the melting ice cube with the cable bundle or changing consumer behavior. We are reading all these dynamics, making real-time decisions and hopefully optimizing the asset for our shareholders.

Brett Feldman

Your parks business has shown a pretty significant recovery over the last year as well. I think one of the last data points you gave us was that per capita spending in the domestic parks are still trending over 40% higher than where you saw them in 2019. I knew you have gotten this question before, but to what extent do you see this as consumers working through over 2 years of savings and pent-up demand versus maybe something that’s more durable in terms of the structural changes you have made? And as part of that, how do you know?

Bob Chapek

Well, we keep, obviously, a close eye out on the macroeconomic situation and inflation and recession and all those parameters and very conscious of watching for it. And by the way, if they ever do hit The Walt Disney Company’s businesses, we have the systems now with like a reservation system inside our park to deal with that, the yield management. It’s made for that type of situation, but it’s also made for the situation that we have right now and we foresee into the future, which is strong, strong demand for our parks products, as we communicated in our last earnings call, and a world where we will still be practicing our yield-based strategies, not because there is not enough people in the park, but because we have more demand than we have supply, which is currently the situation. And all the lead indicators indicate that, that’s the case for the future. So, we keep an eye out on those macroeconomic trends and recession, but we are not seeing any indication right now that it’s going to be impacting us. And so is there some pent-up demand, I am sure there is. People love Disney and when they have had a 2-year absence, that’s a big deal. But we have sort of been open at Walt Disney World for quite a while now, and there is no end in sight, it seems.

Brett Feldman

And maybe just thinking bigger picture, how do you think about the key growth drivers of the park business over the longer term?

Bob Chapek

Well, it’s kind of a symbiotic loop. If you think about it, we make – back when I was running parks, I think it was starting like, I don’t know, 10 years ago, we started really increasing the investment behind our new intellectual property and putting in guest-preferred big attractions. And that has created all this demand that I just referenced and then that demand in excess of supply then gives us the ability to yield those businesses, which then gives us the returns then to make more investment. So, it’s just – it’s a fortuitous loop, if you will, of success. And we are just absolutely thrilled with how our parks business has bounced back. And it is the physical manifestation of the magic, and we love to welcome our guests in all our parks. And it’s just really great now that we actually have our international parks starting to come back and seeing tremendous results in places like Paris and around the world. So, where we are practicing, by the way, the same yield management strategy that we do domestically. So, this sort of fortuitous loop of investment, demand, yield, success kind of looping back on itself is, I think part of our long-run strategy.

Brett Feldman

So, last week, you celebrated both Disney+ Day and the D23 Expo. In your view, what were some of the highlights? And how are you using these types of events to just deepen engagement with the core fans?

Bob Chapek

Yes. For Disney, it really is about the content engine. And for me to – I have been with the company 30 years, in this role, about 3 years now, a little bit short of 3 years. And as I sit in that room for four-day straight and just see the endless talent that’s up there, the tremendous variety and depth of storytelling that we have, it just gives me optimism and pride that, that engine, which drives the whole company, is going to continue to perform. And with the new distribution channels that we have with streaming, it enables us to tell stories in ways that we have never done before. But that’s the way that we define the streaming platforms today, which is just ways to serve up content. But as that then evolves to something much bigger, which is this next-gen storytelling platform, and then you add in things like the membership platform, you have to step back and look at this as Disney as a lifestyle. It’s a lifestyle brand. And it’s not just a bunch of small businesses put together that sort of de facto create a lifestyle, but we need to embrace that. And there is no place you do that more than a convention like D23 where we have – I guess it was 80,000 fans that show up just to celebrate fandom. But it does all start with the creative content. And so that’s why we are so bullish.

Brett Feldman

There has been a lot of volatility in your cost structure over the last 2-plus years as we have been going into and now with COVID as you have been launching and expanding Disney+. And so I sort of have two questions here around cost. One, are you still actually incurring any excess cost, things that were brought in during COVID that maybe be holding back margins a little now? And then I think just a lot bigger, how do you think about the opportunities to just improve the cost efficiency of the business and scale your cost structure more over time?

Bob Chapek

Right. Yes. Movie and TV productions are still experiencing, obviously, in a very stringent standards. And there is, of course, a cost to providing those stringent standards that wasn’t there before COVID. Obviously, there is inflationary pressure as well in general. But Christine and I are locked arms. And the world has changed since COVID, right. We have all kind of returned, and we are thrilled with the demand that we have got and, again, optimistic that will continue into the future, but at the same time, know that the world has changed. And so maybe there are certain things that have become sort of commonplace in The Walt Disney Company in terms of how we operate that we should reconsider, and we are certainly reconsidering those. So, we are spending as much time looking at the top line and driving revenue and growth and great content expenditure as we are squeezing the middle and looking at our cost base. And that work is underway.

Brett Feldman

Do you have any targets in mind yet, or are you still in the evaluation process of figuring out what makes sense?

Bob Chapek

We are still in the evaluation process, but we have got some areas that we are kind of focused on, but no numbers attached to it yet.

Brett Feldman

Alright. I am going to squeeze in my last question here. The Board recently renewed your contract for 3 years. So, where do you see Disney 3 years from now?

Bob Chapek

Well, as I mentioned earlier, the 100th anniversary is an opportunity for us to pivot. And I only mentioned it, I think once today, which is certainly not reflective of its importance. But our next-generation storytelling enabled by technology caters specifically towards guests’ personalized and customized needs is really where the company is going. And within the next 3 years, we think that we are going to be well down the road of being able to demonstrate what that promise is and start to use our streaming platforms again not just as a way to serve up content, pick your title for your content, but really to build out that whole lifestyle brand and continue to make magic for people in ways that they never envision The Walt Disney Company could do. We sort of live for the statement when we see a guest or a consumer saying, “How did Disney do that?” That’s what we want for the future. And I think the 100th anniversary is going to put a lot of wind in our sails to get the entire company motivated to go do the unimaginable.

End of Q&A

Brett Feldman

That’s great. Bob thanks so much for being here.

Bob Chapek

Thank you.

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