In less than two months, Apple (AAPL +0.11%) and Disney (DIS 1.24%) will find themselves competing head-to-head in video streaming. Apple TV+ launches on Nov. 1; Disney+ will follow on Nov. 12. Last Tuesday, the same day that the Cupertino tech giant unveiled the iPhone 11 and 11 Pro, and confirmed the pricing and availability of Apple TV+, Disney CEO Bob Iger stepped down from Apple's board of directors. In a brief regulatory filing from Friday, Apple merely stated, "On September 10, 2019, Bob Iger resigned from the Board of Directors of Apple Inc."
Here's why Iger had to resign.
Image source: Apple.
The writing was on the wall
Iger had already commented earlier this year on the possibility of stepping down from Apple's board. When discussing the upcoming launch of Disney+ and the possibility of bundling various services together in an interview with Bloomberg, the media executive noted that he has been recusing himself from board meetings when strategic discussions around Apple TV+ arise.
Bob Iger. Image source: Disney.
He said he was in "constant" communication about whether or not his seat on the board represented a conflict of interest, and was cognizant of his fiduciary responsibilities:
Well obviously, I'm mindful about my fiduciary responsibility to Apple shareholders as a member of the board. And when the subject [of Apple TV+] is discussed at Apple board meetings, I'm careful to recuse myself and I'm in constant dialogue about making sure that I'm not doing anything that in any way would essentially cause me to be -- wouldn't be in keeping with what an Apple board member would do. That business is still nascent to Apple and still relatively small, and so it's not really discussed all that much. And so far it's been OK, and I'm in constant discussion about it.
Things have changed over the past several months, and Apple shocked investors with Apple TV+'s low price of $5 per month, which undercuts Disney+'s price of $7 per month. The Mac maker is also giving away a free year of its video-streaming service to anyone who purchases an Apple device in an aggressive effort to get users on board.
"I have the utmost respect for Tim Cook, his team at Apple and for my fellow board members," Iger said in a statement provided to The Hollywood Reporter. "Apple is one of the world's most admired companies, known for the quality and integrity of its products and its people, and I am forever grateful to have served as a member of the company's board."
Apple also issued a statement:
Bob has been an exemplary board member for nearly eight years, and for as long as he has led Disney he has been one of Apple's most trusted business partners. He is a dedicated, visionary CEO and a role model for an entire generation of business leaders. More than anything, Bob is our friend. He leads with his heart and he has always been generous with his time and advice. While we will greatly miss his contributions as a board member, we respect his decision and we have every expectation that our relationship with both Bob and Disney will continue far into the future.
Apple will be an important distribution partner for Disney+, and even though video streaming remains "nascent" for Apple, the company last week made clear that it has grand ambitions for its big push into media and original content. The potential conflicts of interest were only going to get more prominent over time, which would require more and more recusals that would in turn undermine Iger's effectiveness as a director.
