Big news for one of the biggest media companies in the world: Disney has reported that it's planning to put everything it can into streaming as its primary focus. The company has announced its intentions to restructure its media and entertainment divisions to better serve its new focus on accelerating a 'direct-to-consumer' business model. Most notably, this will result in Disney combining its media businesses into one centralized organization that handles content distribution, ad sales, and Disney+.
It's a surprising, but not illogical move for the company, which has been pivoting more and more towards streaming as the Coronavirus makes a theater-based business model less viable. While the pandemic has made serious dents in theater business, it may have been something of a boon for services like Disney+. As of August, Disney has over 100 million paid subscribers over all of its various services. The market seems to agree that streaming is the future as well, with company shares jumping over 5% following the announcement.
Despite the coincidental timing, Disney maintains the move is not a direct response to Covid. CEO Bob Chapek responded to the assertion in an interview with CNBC: “I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway.” Disney admits that this restructuring may result in some staff reduction, but says that it won't be at the same scale faced by the parks division of the company, which laid off over 28,000 workers in response to being unable to re-open locations like DisneyWorld.
The new guy in charge of all this will be Kareem Daniel, the former president of consumer products, games and publishing. He will reportedly be responsible for ensuring that streaming turns a profit, and will guide the new combined entity in all of its new duties and responsibilities, and will, in part, set the streaming and theatrical schedules going forward. In conclusion, Chapek suggested that this decision was ultimately at the behest of consumers: “Right now they are voting with their pocketbooks, and they are voting very heavily toward Disney+. We want to make sure that we are going the way the consumers want us to go.”
Source: CNBC