Well Disney is now saying they are restructuring to focus on streaming and a “direct-to-consumer” model.
JUST IN: Disney announces a major reorganization, as streaming becomes the most important facet of the company’s business. “We believe that we’ve got the opportunity to build upon the success of Disney+,” CEO Bob Chapek tells @JBoorstin. https://t.co/fE1Gzo4hol pic.twitter.com/uxJw0Q5Y9z
— CNBC (@CNBC) October 12, 2020
In the clip CEO Bob Chapek says the following:
“Well what we want to do Julia is to accelerate our transition to a real direct-to-consumer priority company. Uh, we believe that we’ve got the opportunity to build upon the success of Disney+, which by almost any measure has been far and above anybody’s expectations, and really use this to catalyze our growth and increase share holder wealth.”
So they want to suddenly accelerate the one arm that wasn’t impacted as deeply as their movie and theme parks. Seems a bit late, but okay. What I find interesting is that they are going all in on this and they mentioned share holder wealth. What about all the people that are going to lose their jobs? What about their wealth?
They are really going to have to pick it up then because they haven’t been bringing as far as big draw releases go, compared to competitors like Netflix, HBO Max and Amazon. Hulu is doing better than Disney+, and is the bright spot right now.
BURBANK, Calif., October 12, 2020—In light of the tremendous success achieved to date in the Company’s direct-to-consumer business and to further accelerate its DTC strategy, The Walt Disney Company (NYSE: DIS) today announced a strategic reorganization of its media and entertainment businesses. Under the new structure, Disney’s world-class creative engines will focus on developing and producing original content for the Company’s streaming services, as well as for legacy platforms, while distribution and commercialization activities will be centralized into a single, global Media and Entertainment Distribution organization. The new Media and Entertainment Distribution group will be responsible for all monetization of content—both distribution and ad sales—and will oversee operations of the Company’s streaming services. It will also have sole P&L accountability for Disney’s media and entertainment businesses.
The creation of content will be managed in three distinct groups—Studios, General Entertainment, and Sports—headed by current leaders Alan F. Horn and Alan Bergman, Peter Rice, and James Pitaro. The Media and Entertainment Distribution group will be headed by Kareem Daniel, formerly President, Consumer Products, Games and Publishing. All five leaders will report directly to Bob Chapek, Chief Executive Officer, The Walt Disney Company. Disney Parks, Experiences and Products will continue to operate under its existing structure, led by Josh D’Amaro, Chairman, Disney Parks, Experiences and Products, who continues to report to Mr. Chapek. Rebecca Campbell will serve as Chairman, International Operations and Direct-to-Consumer. Bob Iger, in his role as Executive Chairman, will continue to direct the Company’s creative endeavors.
“Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value,” Mr. Chapek said. “Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it. Our creative teams will concentrate on what they do best—making world-class, franchise-based content—while our newly centralized global distribution team will focus on delivering and monetizing that content in the most optimal way across all platforms, including Disney+, Hulu, ESPN+ and the coming Star international streaming service.”
Under the new structure, the Company’s three content groups will be responsible and accountable for producing and delivering content for theatrical, linear and streaming, with the primary focus being the Company’s streaming services:
- STUDIOS: Messrs. Horn and Bergman will serve as Chairmen, Studios Content, which will focus on creating branded theatrical and episodic content based on the Company’s powerhouse franchises for theatrical exhibition, Disney+ and the Company’s other streaming services. The group will include the content engines of The Walt Disney Studios, including Disney live action and Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Lucasfilm, 20th Century Studios and Searchlight Pictures.
- GENERAL ENTERTAINMENT: Mr. Rice will serve as Chairman, General Entertainment Content, which will focus on creating general entertainment episodic and original long-form content for the Company’s streaming platforms and its cable and broadcast networks. The group will include the content engines of 20th Television, ABC Signature and Touchstone Television; ABC News; Disney Channels; Freeform; FX; and National Geographic.
- SPORTS: Mr. Pitaro will serve as Chairman, ESPN and Sports Content, which will focus on ESPN’s live sports programming, as well as sports news and original and non-scripted sports-related content, for the cable channels, ESPN+, and ABC.
The Media and Entertainment Distribution group, led by Mr. Daniel, will be responsible for the P&L management and all distribution, operations, sales, advertising, data and technology functions worldwide for all of the Company’s content engines, and it will also manage operations of the Company’s streaming services and domestic television networks. The group will work in close collaboration with the content creation teams on programming and marketing.”
So monetization means advertising. Which is interesting because I remember reading about Disney getting ready their Media buy which usually happens in October or November. Right when this announcement comes out. It sounds a lot like they are trying to leverage it for ad packages like Peacock.
Also Arthur Sadoun, the CEO of the French advertising agency Publicis sent out a memo to their employees today that they are now working with the Walt Disney Company. Part of how they got Disney to work with them is with their “new subsidiary, Epsilon Data Management, which claims on its website to have information “on virtually every U.S. consumer.” Well that’s reassuring.
So they are going to double down on Disney+, but what about the theme parks and all the job losses? It just sounds like Disney is trying to smoke and mirror it all for the investor meeting next month, because no dividends isn’t going over well. The fact that image and share holders means more than their people makes them just the same as any other corporation. The Disney Difference isn’t really much different and hasn’t been for a long time now.
Oh and on the subject of that missing Investor Day that was scheduled for October 7th.
The one that somehow accidentally got listed wrong for weeks and Disney supposedly didn’t notice until layoffs and bad press got worse, yeah, it’s rescheduled for December 10th now. It absolutely was only an error and had nothing to do with them pushing it back for this announcement and their deal with Publicis. So they needed more time to get the spin ready.
What do you think? Comment and let us know!
Brought to you by Chapek’s word of the day “catalyze”
Pirates & Princesses (PNP) is an independent, opinionated fan-powered news blog that covers Disney and Universal Theme Parks, Themed Entertainment and related Pop Culture from a consumer's point of view. Opinions expressed by our contributors do not necessarily reflect the views of PNP, its editors, affiliates, sponsors or advertisers. PNP is an unofficial news source and has no connection to The Walt Disney Company, NBCUniversal or any other company that we may cover.