With a market capitalization of approximately $170 billion, Walt Disney (DIS -0.04%) is among the biggest entertainment companies in the world. But with its stock price down more than 30% compared to this time last year, many investors may be wondering if the company is a worthwhile buy right now.

Let's explore what's happening with the House of Mouse and what its future might look like.

From the old guard to the new -- and back again

In Feb. 2020, Bob Iger stepped down as CEO of Walt Disney, passing the role to his hand-picked successor, Bob Chapek. At the time, Chapek noted that he intended to continue along the path that Iger had set out, suggesting that "[it] will pay dividends to shareholders for years to come."

However, Chapek's time as CEO was marred by weak earnings, political scuffles, and a high-profile legal battle with Scarlett Johansson over the release of Black Widow. By late November 2022, Chapek was out, and Iger was back in the CEO position.

At the time, the company said the CEO had a couple of core missions: establish a plan to drive new growth and (again) find a successor to take over within two years.

Almost immediately, Iger made key personnel changes and told Disney employees that he was planning to introduce a new structure that "puts more decision-making back in the hands of ... creative teams and rationalizes costs."

A proxy fight almost happens

Despite Chapek's relatively short tenure, he did oversee the exponential growth of Disney+. At the time of his departure, the streaming service had 164.2 million customers around the world. Yet despite the perceived success, the streaming service was not -- and still isn't -- profitable. And with subscriber growth proving harder to come by over recent quarters, some have questioned Walt Disney's streaming approach.

Nelson Peltz, an activist investor, made news at the beginning of 2023 by starting a proxy battle with Walt Disney's board. Peltz complained the company had overcommitted itself to streaming and that it was relying too heavily on the success of its parks operation.

Initially, Disney pushed back against Peltz, suggesting he didn't understand streaming. However, Disney's fiscal 2023 first-quarter earnings then showed that the company had lost 2.4 million Disney+ customers -- the first time it had seen its subscriber base go south.

Iger addressed the situation during Disney's earnings call, where he outlined a plan to find $5.5 billion worth of savings over the coming years -- $3 billion of which will come from the company's content unit. Satisfied by the plan, Peltz called off his proxy challenge the following day.

The risk of reducing content spend

While some on Wall Street might be satiated by Disney's decision to tighten its content spending, the company is risking near-term revenue growth. After all, it built the Disney+ brand with high-concept programming such as The Mandalorian, Loki, and Willow -- TV shows that typically cost in the range of $15 million to $20 million per episode. And while Disney is not alone in spending big on shows, it's long been the heavyweight when it comes to overall content budgets.

Netflix (NFLX -0.63%) committed $17 billion to programming in 2022, while Amazon (AMZN 3.43%) invested $16.6 billion on video and music content over the same period. By comparison, Walt Disney spent an estimated $33 billion during the last fiscal year -- which itself was an increase of $8 billion on the previous 12 months.

Even as Walt Disney reduces its content spending by a few billion dollars over time, it will still be investing a significant amount into Disney+ -- which, as the Peltz situation demonstrates, could prove contentious for some investors if fresh growth is not found soon. And considering that the company has made clear its plans to have a new CEO in place by the start of 2025, some may wonder if Iger even has enough time to execute his plan.

Those considering Walt Disney as an investment can at least take comfort in the company's non-streaming business; the House of Mouse generated $7.4 billion in revenue from its parks business in the first quarter, up from $5.5 billion in the prior-year quarter. And while Peltz may not like that Walt Disney relies on one part of its operation to prop up another, diversification is a noted strength for the company.

Market watchers would do well to watch what Iger says next about Walt Disney's streaming ambitions. Chapek may once have been happy to follow his predecessor's route, but with Iger's return, it seems the CEO is now about setting Walt Disney on a whole new path.