by Ray Keating
Analysis
DisneyBizJournal.com
August 3, 2020
It’s been a wild eight-plus months for Kevin Mayer, the former head of Disney’s streaming business.
In November of last year, Disney+ launched to great acclaim, and subscriber numbers ran far ahead of expectations. The new streaming service and Hulu were under the leadership of Mayer at the Walt Disney Company. He was riding high, and most watchers expected him to be named Bob Iger’s successor to run the entire House of Mouse empire.
However, Iger and Disney surprised just about everyone in February, when Iger announced he was stepping down immediately as CEO, and Bob Chapek – not Mayer – was named to run the Walt Disney Company.
About three months later, on May 18, Mayer announced that he was resigning from Disney to take the job of CEO of TikTok, the app for easily making and sharing short videos, as well as chief operating officer of the app’s parent company, ByteDance, a Beijing-based company.
It’s not unusual for a key executive passed over for the C-Suite to leave for another position. But Mayer had one of the best streaming jobs at the top entertainment company on the planet. And while TikTok had gained enormous popularity – though largely among teens – there were questions about the company. And those questions have only multiplied since Mayer became CEO at the app.
The combination of TikTok’s wild popularity and the fact that it is a Chinese company, with potential exposure to informational demands and controls by the Chinese communist government, makes for an uncertain future, to say the least. The U.S. federal government has national security concerns, and has unleashed attacks on TikTok, with President Trump threatening to shut it down in the U.S. The Indian government already has banned TikTok in that country.
Clearly, TikTok was hoping that hiring Mayer, as an American CEO, would help, along with Mayer’s U.S.-China experience given the fact that Disney is deeply involved in China, with parks in Shanghai and Hong Kong.
In fact, the ByteDance founder, Zhang Yiming, took certain structural precautions with his company hoping to avoid political woes. The New York Times reported:
He made TikTok unavailable in China so the video app’s users wouldn’t be subject to the Communist Party’s censorship requirements. He stored user data in Virginia and Singapore. He hired managers in the United States to run the app and lobbyists in Washington to fight for it on Capitol Hill. None of that counted for much in the end.
In the U.S., the politics have swung between Trump threatening to close the app down to the president being open to Microsoft buying the U.S. business of TikTok. And in a still more bizarre and unprecedented twist, President Trump wants the U.S. Treasury to receive “a lot of money” for “making it possible for this deal to happen.”
According to The Wall Street Journal, Microsoft not only is interested in TikTok’s U.S. business, but talks also are covering the app’s business in Canada, Australia and New Zealand. September 15 stands as the target date, for now, to get a deal done. Microsoft apparently is enticed by the idea of expanding its business to young consumers, given the company’s success in recent years with corporate customers.
Whether a Microsoft deal gets done or not, either outcome presents further uncertainty for Mayer. If Microsoft purchases this chunk of TikTok, one would think that Mayer would go with the U.S. part of the business. And then one has to wonder if Microsoft would want to keep Mayer in the top spot at the U.S. version of TikTok. If so, he would suddenly be back running one part of a larger business. If the Microsoft deal doesn’t materialize and the app gets shutdown in the U.S., what value would Mayer then bring to TikTok?
So, many questions and unknowns loom for a guy who, just a few months ago, was one of the top players in online streaming. Indeed, Mayer has gone from the heights of playing a key role at one of the world’s top brands – Disney – to now slogging around in the muck of political controversy in the U.S., China and India. You have to wonder if Mayer is wondering.
In the end, Kevin Mayer might still emerge from this seeming mess sitting pretty – perhaps leading a Microsoft effort to compete with Facebook. But right now, it seems that leaving the leading streaming gig at Disney might not have been the best choice for Mr. Mayer.
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