Disney made an announcement yesterday which stated that it would begin to restructure its media and entertainment business ventures. The California-based entertainment giant plans to do so in order to prioritize its three streaming services: Hulu, Disney+, and ESPN+.
According to Chief Executive Bob Chapek, the decision to do so was made in order to maximize Disney’s commercial profits. Chapek said that Disney would begin to reject predetermined decisions about how its entertainment products were to be positioned within the market. In this way, Disney would be more able to formulate strategies which would increase its commercial value.
In an interview on CNBC, Chapek said, “What we want to do is provide some level of objectivity and really make it a decision that benefits the overall company and shareholders.”
The Success of Disney+
During the first half of 2020, Disney+ proved to be extremely profitable for Disney. Aided by viewers who chose to stay at home and avoid cinemas during the peak of the Covid-19 pandemic, the success of Disney+ mitigated losses suffered by Disney’s other businesses.
Since its launch in November 2019, over 60 million people from all over the world have subscribed to Disney+. This figure is well in excess of that which was predicted at the time of its launch. It was thought that at the end of 2024, Disney+ would have a total of 60 million to 90 million global subscribers.
Disney Movies and Covid-19
The effects of the Covid-19 pandemic have also driven Disney to increase their frequency of movie releases online. The company also stated that this practice would be likely to continue beyond the end of the pandemic.
Disney’s profits from movies took a significant downturn during the pandemic due to the many closures of cinemas all over the world. Consequently, Pixar intends to send its upcoming animated movie Soul directly to Disney+ in December when it is to be released. Soul will therefore not receive a standard theatrical release.
Disney also selected long-serving company executive Kareem Daniel to become its head of the new Media and Entertainment Distribution Group. This group is in charge of operations related to Disney+. It also manages profits and losses as they relate to content creation including television programs, movie productions, and sports programming.
Disney’s restructuring also caused the company to become divided into three distinct content arms. The first of these is studios content, which produces movies and television programs. The second is sports content which includes ESPN as well as all associated services and content. The third is general entertainment content which is composed of TV studios including National Geographic, ABC Signature, and FX.
Many of Disney’s rivals within the entertainment industry have also made recent changes to their entertainment business strategies. WarnerMedia and NBCUniversal are among the entertainment powerhouses which have done so.
13th October 2020 16:25
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