During the short period that Disney+ has been active across the major markets of the Asia-Pacific region — just a little over two years in most countries — the Walt Disney Co. has gone through a period of uncharacteristic turmoil. A CEO shakeup, a secular reassessment of the streaming business, cost-cutting, shaky box-office results, speculation over asset sales and activist investors clamoring at the gates. But the company’s most recent earnings report beat analysts’ forecasts and gave CEO Bob Iger some of his Magic Kingdom mojo back. Iger reaffirmed that the company’s streaming operation will be profitable by this summer, while also unveiling a slew of projects and deals.

Related Stories

When Disney first began rolling out Disney+ across APAC in 2021, the company signaled it was preparing to go toe-to-toe with Netflix as a mass entertainment platform that would invest heavily in local content throughout the region. At a splashy content showcase in Singapore that year, Disney’s president of Asia-Pacific, Luke Kang, promised to greenlight over 50 Asian originals by 2023. With the industry — and Wall Street — still exclusively focussed on streaming platforms’ subscriber numbers, the populous Asia-Pacific region was the place where analysts believed most of the globe’s growth resided.

That first slate yielded several content successes for Disney+, including Japanese thriller hit Gannibal, musical documentary BTS Monuments: Beyond The Star, and Korean action thriller Moving, which became the streaming service’s most-watched international original of 2023. Disney has doubled down on Korean content with a growing 2024 slate, featuring a new series in the Moving universe, Light Shop, and a period drama starring Korean film icon, Song Kang-ho (Parasite). But Korea aside, amid the fiscal discipline that has defined the second coming of Iger, Disney has conspicuously downshifted on the scale of its local content output.

To get a clearer sense of the current streaming strategy in Asia and how Iger’s new initiatives are being enacted in this vital region, The Hollywood Reporter connected with Kang over Zoom for a wide-ranging discussion (the interview has been edited for length and clarity).

You’re a veteran of both Disney and the Asian entertainment business, so I’m curious to hear whether you encountered anything during the first couple of years of Disney+ in APAC that surprised you. 

You know, it’s interesting, because, yes, the service has only really been in this region for a couple of years. People seem to forget that. The company has been here for decades, but we’ve been in the streaming business for a very short time — and we’re very happy with the progress we’ve made. 

I don’t think anything really surprised us, but we’re learning a few things. For one, the consumers are extremely sophisticated — not just in what they want in terms of content, but also in terms of product and engagement with the brand. All of that is magnified in the direct-to-consumer business because you have that direct link. Previously, in most of our businesses, we had that middle layer and we were mostly a B2B business. Now, we’re interacting with consumers directly. We knew our consumers were sophisticated, but how quickly they know when something is good or bad has really impressed us. That applies when something doesn’t work, but also when a title hits. Our Korean series Moving became the globally most-watched international original on Disney+ in 2023. Now, we were very confident in that title and had high hopes for it, but we were really surprised at the speed with which that happened — it came on very fast. 

These past two years have certainly been eventful for the Walt Disney Company overall. How has the streaming strategy for this part of the world evolved over that period 

Well, when we first started out in streaming, let’s just say that it was a different environment — whether the macro environment, the industry environment or the internal environment at the company. So, the decision that was made at the time was to try new things. If you look at those first 12 months, we did a bit of everything — lots of genres and different types of content. For North America, Western Europe and the higher per capita markets of Asia — Australia, New Zealand, Japan, Korea, Hong Kong, Taiwan and  Singapore — our strategy was to go with a more traditional pricing for streaming. But in some markets of Southeast Asia, where per capita incomes aren’t as high, we tried something new by going with a much lower-priced, mass-market pricing strategy.

If you want to go after the masses, you need to produce a lot of mass-oriented content, and that was reflected in our slate at that time. But as the macro environment evolved —and the internal environment evolved with Bob [Iger] coming back — we had to pivot. What Bob asked us to do was really to focus. So we had to focus on where we felt we would get the biggest bang for the buck in the region. We also realized that the mass strategy in Southeast Asia would have been a very long-term trek. So we decided to pivot to a much more traditional, high ARPU (average revenue per user) strategy in Southeast Asia. That wasn’t easy to do — it’s kind of like changing the wheels while the car is already driving down the road — but over the last 18-24 months we’ve successfully gotten to a solid subscriber base with good ARPUs in a lot of our Southeast Asian markets. 

How would you describe the content strategy for the region now? 

Well, we’ve put the focus on our higher ARPU markets and focused on what resonates. Obviously, our global franchise content resonates everywhere, and that’s something that we know we have as our bread and butter. But we have to ask ourselves, what more can we do to enhance engagement and the quality of the service? Time has validated our early belief that we would get the most value from focusing our resources on Korean live-action and Japanese anime. This is fairly well known in the industry now — these are the categories that are traveling.

We’ve also dug into our data and we’ve done a lot of consumer research over these years and learned a lot about how these markets are evolving. As the consumer in many markets goes from having 1.2 to 2.1 streaming accounts, on average, the dynamics of the market change. We don’t necessarily have to be all things to all people right away, because they have more than one account. There are different angles we can pursue to grow our business. Many analysts wanted us to be a certain thing and to compete with a certain company, but what we have learned pretty quickly is that we have to chart our own course. We want to be a specific type of service for specific types of people in each of our markets — and, again, we can’t be all things to all people. And if you look back, we’re very happy with what we’ve achieved so far. With our early focus on Korean entertainment, nine out of the top 15 international originals on Disney+ last year by views were Korean. We don’t have the same volume as some of our competitors, but what we’re focusing on now is getting big titles that will have a big impact. 

I’m compelled by the realization that you can’t be everything to all people in APAC. Because during the early phases of the Bob Iger 2.0 era, there were questions among analysts about whether Disney+ should streamline around the core Disney family IP or continue to try to go big as a mass-market entertainment platform. Based on recent moves, it seems like the decision has been made to go for the latter. The Hulu buy-out was contractually required, so perhaps that kind of forced the company’s hand in that direction. But with the new joint-venture sports platform, the standalone plans for ESPN+, and the ambitions to create a new Disney mini-bundle for streaming, it seems like Iger’s plan is to continue to go big. But perhaps some of this strategy doesn’t fit for Asia. For example, outside of India and Australia, I don’t believe Disney owns any sports rights in the region. So, is the mid-term strategy in APAC fundamentally different from the ambitions in the domestic U.S. market? 

I think you have to look at a couple of factors here. First, we’re very early in the cycle here in Asia. Disney+ has been in the U.S. for five years already, and Hulu much longer. So we’re in a very different stage of growth in APAC. We’re also dealing with an environment in which there is very aggressive competition — global competition, but also local competition. Every market in Asia has some strong local competitors. And if you look at the movie and television businesses in these countries, they are very much driven by local content. Given that we didn’t really do local content before in these places, I would say we are doing pretty well — especially considering how young we are in that game. 

So, if you look at all of those factors, obviously we had to make some choices to establish a beachhead in a certain way. But that absolutely doesn’t mean that we’re not eventually going to go after the mass consumer that’s out there in the region. This is the fastest growing region in the world and we want to be a major part of that tremendous opportunity. But we have to make some choices to establish our service. You know, the Disney brand is so strong that people sometimes seem to think we have a birthright or something to be successful. But none of this is easy and you have to make smart strategic calls. We’re very happy with the great foundations we’ve established to build upon. So, we do have those big ambitions, we’re just at a very different stage in the growth story over here.

Amid the moves being made in the U.S., it’s also pretty clear that advertising will be central to Disney’s strategy for sizable growth in the streaming business. Netflix has now switched on its ad tier in Japan and Korea. Is that something Disney+ will soon do? Or is it a matter of waiting until the subscriber base is big enough in these APAC markets to take that step? 

Yeah, we’re looking at it. It really depends on multiple factors in each market. One, is our sub base, but we also have to look at our proxies, such as pay TV. Asia-Pacific overall had a very different development pattern for multi-channel TV and advertising, so we want to make sure we tread carefully and make these moves at the right time. But honestly, it’s just a matter of when and how. 

Similarly, it’s now clear that sports will be a pillar of Disney’s streaming strategy in North America. In Australia, a sports bundle would make a lot of sense, but elsewhere in APAC — where you don’t currently hold rights — will sports have a role in the eventual strategy? 

Again, that’s something we’re always looking at, but always on a market-by-market basis. In Australia, we have two ESPN channels and we’re well positioned as the home of American sports. So you’re right, we’re looking at that there. 

People perhaps forget that we used to run Fox Sports in the region, so we do have a lot of experience in the sports sector here. It’s the diversity of these markets that presents some challenges that you don’t find in other regions. There are very few sports that cut across all of APAC — even [soccer]. Some of the leagues do fairly well, but they vary in their popularity depending on the market. We had a relationship with F1 for a long time, and that cuts across countries in some demographics. But generally, it’s very diverse. Japan and South Korea, for example, love baseball and golf — but that’s basically non-existent in Southeast Asia, Australia and New Zealand. The Philippines loves basketball, and that has some appeal in Taiwan, Japan and Korea, but nowhere near to the same degree. So, it’s challenging. That’s not to say there isn’t a play. Nothing is off the table. It’s just a matter of finding the right opportunity at the right time. 

Turning back to Korea briefly, on the one hand, you’ve had your biggest content successes with Korean titles and the new Korean slate is impressive. But on the other hand, the streaming market within Korea is very competitive and Disney+ ranks pretty far down the charts in terms of market share there. Netflix has a healthy lead on everyone, and several strong local players rank ahead of you. To win more of the Korean market, you would probably have to boost your output of local content considerably. So, is the goal in Korea to win more of that local pie, or is it more about using Korea as a content hub to create titles that appeal to other markets? And how does that unique dynamic sit with you? 

That’s a very interesting question. But, to begin with, we can’t just utilize Korea as a creative base without having a major presence in the market. Those two things are not mutually exclusive. But you are right; it is a hyper-competitive market. Right now, it’s kind of like a gold rush. Everybody wants a piece of Korean content. Korean content being popular across the region is not a new thing; it’s been popular across Asia for 20 years. The fact that it can now travel globally — that’s something new. But there’s a very limited supply; it’s not a massive factory that can relentlessly produce hits. So, getting access to that content was critical for us. We had to build an infrastructure that allowed us to get access to top stars and writers. We’re very happy with the foundation and reputation we’ve built. We may not be producing the same volume as some of our competitors, but in terms of the scale and star power of our projects, we’re right at the top. Moving had the biggest budget per episode of any Korean series ever — which was then justified by its success. And our new slate features some of the very top names in Korean entertainment. 

Looking to Japan, The Hollywood Reporter put out a piece late last year arguing that all of the big investments being made by the global streamers in Japanese original content, which are injecting international content standards into the local industry, might reawaken the Japanese live-action film and TV sectors — which once were regional and global leaders but have fallen into an inward-looking stasis in recent decades. What do you make of that thesis? 

I would fully agree with you there. If you look back 30 years ago, Japanese content was the benchmark for the region, right? Everybody in Asia watched Japanese dramas and movies — and not just anime, but live-action too. If you look at the size of the market and the resources available, there’s no reason why Japan shouldn’t go back to being a major player. Some structural challenges developed in the TV industry over the years, but those obstacles have started to crumble. I fully believe the Japanese entertainment industry will have a renaissance — but exactly when that will come is the question. Nothing happens overnight.

One of the things that happened in Korea was that as the industry grew and became more popular overseas, more young talent came in. Many of Korea’s brightest college graduates were drawn to work in the content industry and there was this flood of young talent. That hasn’t happened in Japan yet. When you look at Japanese entertainment, a lot of the top stars are people who were popular 20 or 30 years ago. The amount of capital in the industry also needs to increase. Japan has a much bigger economy than Korea, but the average budget of a Korean drama is several multiples more than a typical Japanese series. Japan should be outspending Korea, but right now there just aren’t enough high-quality productions to justify that. So, Japan needs some of these virtuous cycles to take hold. I’m in constant contact with our Japan team and we want to be right there when it eventually happens. 

Is there anything we should look out for in your Japan slate?

Honestly, at the moment, we’re more focused on anime than live-action. But we’re always looking for exciting, big projects. We’ve got a second season coming for Gannibal, our first Japanese live-action hit. And I hope that a show like Shogun, which is packed with Japanese talent, will help stimulate the industry in some of the positive ways we’ve been talking about. 

China’s movie box office just set a new record during the Chinese New Year holiday period. And Chinese tentpoles are earning more than ever, despite the economic slowdown in the country. But Hollywood films, including Disney’s, have fallen out of favor. The market share for U.S. movies in China is now smaller than it has been in a generation. Is there anything in particular that Disney is doing to try to win back the Chinese filmgoer — beyond the usual belief that China requires patience and the long view?

You know, having lived there for several years and having run our business there directly, the one thing that I know Chinese consumers love is good storytelling. If you look at our record, there were titles that people said would never work in China, but then somehow they broke out hugely. So, as always, it’s really about quality storytelling and positioning those stories in the right way so that they are relevant to people’s lives. Yes, since COVID the market has pivoted much more toward local tastes. But I think that will come into balance. At some point, the pendulum will swing the other way. The thing about China is you just need one big, breakout film to set a new trend. Then, all of a sudden, people will start saying, let’s go see Hollywood stuff again. I think the whole industry just needs that one big breakthrough. Hopefully, it will come from us. We’re as optimistic as ever about our upcoming slate and we’re very focused on positioning those stories in the right way. 

Are there any additional trends in the Asian entertainment landscape that excite you? 

Well, for a long time, the question was always, “How is Hollywood content resonating in Asia?” Now, we’re in a new period of asking, “How is Asian content resonating in the West?” It’s a very different era with streaming. That’s very exciting — not just for Disney, but for all of the creative communities of this region.