Both Disney’s entertainment ventures and experiences, such as Disney Parks, are now in a “healthy competition” for profitability, CEO Bob Iger said in the Q1 investor call this morning.

Entertainment and Experiences Are Profitable

“Look, if you go all the way back to 2005, when I became CEO, the return on investment of capital, and the then parks and resorts business, was not impressive,” Iger explained. “And actually [it was] not acceptable.” He noted that the company wasn’t building or expanding its experiences due to the low levels of returned invested capital. However, the tides have turned, and now that the parks and resorts are more profitable, Disney is investing more in improving and expanding them.

“When you look at the footprint of the business today, it’s never been more broad or more diverse, and the projects that we have underway are gonna make it even more so,” Iger went don’t. “We’re expanding in every place we operate.” He referenced the Disney park being built in Abu Dhabi as an example, citing the potential of expansion in that area of the globe.

In conjunction with the success of experiences, Disney’s experiences sector is also doing well. Iger looked back at the losses during COVID and said that the streaming side of the business was “obviously not [in] an acceptable place.” However, streaming since then has grown, and between the titles Disney is releasing soon and in development, Iger said entertainment and experiences are now in a “healthy competition” for profitability.

“We have a healthy competition now in our company, in terms of which of those two businesses is going to essentially prevail [as] the number one driver of profitability for the company,” He said. “But I’m confident they both have that ability. Meaning both have the ability to grow nicely into the future, giving all the investments that we’ve made and the trajectory that we’re on.”

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