(Reuters) – Walt Disney’s streaming service will begin cracking down on password sharing starting in June, Chief Executive Bob Iger said on Thursday, as the entertainment conglomerate looks to accelerate subscriber growth and make the business profitable.
Iger also signaled the need for consolidation in the streaming industry and said Disney is “eventually” targeting double-digit profits for the business in a wide-ranging interview with CNBC.
A crackdown on password sharing by streaming rival Netflix (NASDAQ:) helped it attract nearly 22 million subscribers in the second half of 2023 and upset Wall Street expectations.
Iger’s interview came just a day after Disney investors backed him and other company directors in a proxy battle with activist investors including Nelson Peltz, who argued that the House of Mouse has not performed well in the era of streaming television.
“The proxy vote was a decisive and wholehearted endorsement by the board,” he said, noting that the company takes the topic of CEO succession, a key shareholder concern, very seriously.
The victory strengthened Iger’s position at a crucial moment. Disney is trying to revitalize its film and television franchises, make its streaming division profitable and find partners to build the digital future of sports network ESPN.
Meanwhile, in an interview with CNBC just minutes after Iger’s interview, Peltz expressed hope that the Disney CEO can keep his promises.
“If they do that, they won’t hear from me again,” Peltz said.
Iger also responded to criticism from billionaire Elon Musk, who supported Peltz and in November blasted advertisers including Disney with profanity for leaving social media platform X over concerns about anti-Semitic content.
“I ignore it,” Iger said of Musk’s criticism.
Disney shares were up about 0.7% in morning trading. They’re up about 30% this year, making them the top blue chip stock.
Iger said Thursday that talks about a strategic partner with ESPN are ongoing.