Last month, Disney’s Bob Iger surprised everyone in entertainment by announcing he was stepping down as chief executive, effective immediately. On a quickly scheduled conference call, Iger handed the reins of one of the world’s most powerful media companies to another long-time Disney executive.

The second surprise was that the new chief was not the very capable chairman of Disney’s direct-to-consumer and international businesses, Kevin Mayer. Instead, Bob Chapek, a 27-year Disney veteran who for the past five years had been running the company’s theme parks unit, is now top mouse.

Given the strategic importance of direct-to-consumer, led by the shiny new Disney+ service that launches in the UK on Tuesday 24 March, the choice of Chapek as the next chief executive seems a bit odd. So too does the timing: Iger had announced a year earlier that he would step down as chief executive in 2021. So why the early departure?

Turns out he’s not really leaving at all. Iger becomes the company’s executive chairman and Chapek will report to him, but the former’s main focus for the next two years will be on running Disney’s “creative endeavours”.

Chapek will be running Disney’s day-to-day operations – where those who know him say he functions with “military precision” – while Iger’s focus will shift to the creative side of the business, which he says is now “the biggest priority”.

He’s not wrong. Indeed, while content has always been key to Disney, competition for audiences is heating up. Offering the right kind of content, and enough of it, is going to be a key differentiator. But is he really the right man to be setting the creative agenda?

Acquisition strategy

Iger has been a transformative chief executive. He led Disney’s successful acquisition strategy, including Pixar in 2006, Marvel in 2009 and Lucasfilm in 2012, and capped it all with the $71.3bn (£55.9bn) acquisition of the entertainment assets of 21st Century Fox last year.

Now the man who built up Disney’s content-creation machine and launched the radical move into streaming is keen to make sure the creative side of the business is also secure.

The success of Disney+ gives Iger a strong platform to make the transition from chief executive – signing up about 30 million subscribers globally to the SVoD service within three months of launch is pretty spectacular.

The success has been driven in no small part by the appetite from consumers for Disney+’s exclusive space cowboy drama, The Mandalorian. The toy version of ‘Baby Yoda’, the eponymous bounty hunter’s cute sidekick, has been a top-ranked Amazon pre-order since before Christmas, even though it will only start to ship on 1 April.

The big question, therefore, is: what is the next show that will help set Disney+ apart? What is the Chapek-era Mandalorian?

The pivot to streaming puts a big question mark over how Disney treats the release windows for its content among its streaming, theatrical, television channel and syndication services and platform partners.

That’s also a key question for Disney partners, including Virgin Media and especially Sky, which has used Disney channels and films in particular to build its customer base.

It took Sky several years to hammer out a deal with Netflix, but that was then. A deal to add Disney+ to the Sky offer was announced recently, before its UK launch. Clearly, the importance of the Disney brand concentrated minds at Isleworth.

And what a brand it is: Disney+ has access to the ‘Big Five’ – Disney, Pixar, Marvel, Star Wars and National Geographic – and the final series of Star Wars: The Clone Wars could be a tent-pole successor to The Mandalorian that draws in new subscribers. Research from Parrot Analytics on steaming audiences’ appetites indicates that ramping up sci-fi and comic-book- style shows, including stories from the Marvel Studios brands, is a pretty safe bet.

But the pressure is on, even for a big player like Disney. There is a tsunami of content from the SVoD players, including Netflix, Amazon Prime Video and Apple TV+, and upcoming hybrid streamers like NBC Universal’s Peacock.

The number of AVoD services such as Viacom-CBS’s PlutoTV is growing fast too, expanding consumer choice and heating up the competitive landscape. This month, Comcast spent $100m (£77.8m) to buy ad-supported streaming service Xumo and Fox Corp is reportedly in talks to buy AVoD streamer Tubi TV.

Elsewhere, Discovery chief executive David Zaslav told analysts this month he is looking to create an “aggregated platform of [the company’s] channels, brands and personalities”, instead of continuing the approach of developing “superfan silos” around specific interest areas, though it’s unclear how Eurosport might fit into this.

Back at Disney, Iger took over the top job from former chief executive Michael Eisner in 2005. The latter infamously described the former in a 1996 memo to the Disney board as “not an enlightened or brilliantly creative man”, but later championed Iger’s candidacy for chief executive.

“The purchase with the most transformative potential for Disney is the Fox entertainment assets”

However, perhaps Iger’s best creative skill has been in identifying the right creative assets, be it Pixar or Marvel, and in appointing and promoting the right creative people.

The best example of the latter is Alan Horn, chief creative officer and Walt Disney Studios co-chairman with Alan Bergman. The pressure is on the so-called ‘Two Alans’ to mine the big brands that Iger has pulled into Disney into new, compelling content. In particular, that means feeding the streaming services: Disney+, Hulu (whose potential as a global service is coming back into focus) and ESPN+.

Ageing up

The purchase with the most transformative potential for Disney is the Fox entertainment assets. These will allow Disney to ‘age up’ beyond its core family brands and family values, opening an opportunity to tap into other genres, move beyond PG ratings and into older age groups. Hulu, targeted at more sophisticated audiences, may well benefit most.

Iger may be more a ‘suit’ than a ‘creative’ but, according to Horn, he has both courage and vision, which is a potent mix. Last year, Disney owned the box office with seven of the 10 top-grossing films. Iger also made the theme parks a priority, including the $5.5bn (£4.3bn) Shanghai Disney Resort in China and the revamping of Disneyland to include a 14- acre Star Wars-themed area.

Disney’s new boss Chapek has doubled down on leveraging the Disney brands into ‘entertainment as experiences’ and its content is increasingly being consumed in both the physical and virtual worlds. Lessons are being taken from interactive storytelling and gaming, with technologies like VR and AI used to supercharge the experiences.

The recent coronavirus outbreak put a cloud over Chapek’s rise to chief executive – Tokyo Disneyland has closed for at least two weeks and fears surrounding the virus have fuelled a fall in the Disney share price – though it is easy to imagine that self-isolation could result in more subscriptions for Disney+.

Chapek’s role is clearly about executing well the strategy Iger has built, while the latter works to secure the creative future of Disney.