Walt Disney Co. is shaking up its operations to refocus on the thriving Disney+ business, redoubling its push to become a global streaming giant like Netflix Inc.
The company is putting its TV networks, film studio and direct-to-consumer divisions inside one big group called Media and Entertainment Distribution, Disneysaid on Monday. Existing content chiefs will continue to oversee their businesses, but they will now be directly able to choose what movies and TV shows air on Disney’s growing lineup of streaming services.
A new star, Kareem Daniel, who previously headed up consumer products within the theme-park division, will now take over distribution for the Disney+, ESPN+ and Hulu streaming services. The move also helps diversify Disney’s mostly White management ranks: Daniel is one of the most prominent Black executives at the Burbank, California-based company.
Investors applauded the move, sending Disney shares up as much as 5.5% in late trading. Shareholders such as Third Point’s Dan Loeb have urged the company to put more resources into streaming. He sent aletter last week to Disney Chief Executive Officer Bob Chapek saying it was time to move on from movie theaters, which he compared to horse-drawn carriages.
Loeb’s campaign didn’t spur Monday’s changes, which Chapek said have been in the works for months. The investor has also called for Disney to redirect its dividend money toward streaming, but the company already suspended the payout in July and hasn’t committed to future dividends.
This isn’t the first major shake-up for Disney in recent weeks. Rocked by a slowdown at its theme-park and cruise operations, Disney said late last month that it waslaying off 28,000 workers. The company hasn’t been able to reopen its parks in California yet, hampered by state restrictions.
Other media giants, includingAT&T Inc.’s WarnerMedia andComcast Corp.’s NBCUniversal, have been cutting employees as well, trying to weather a pandemic-fueled slump that’s hurt advertising, movies and in-person attractions.
Though Disney may now have fewer divisions reporting their financials, the company intends to break out results to continue to give investors clarity about individual businesses. It plans to hold a virtual investor day on Dec. 10, following its quarterly earnings report on Nov. 12.
The changes underscore how important streaming is becoming to Disney and the whole media industry. Traditional TV networks such as the company’s ABC and Disney Channel are seeing viewers and cable-TV subscribers shift to on-demand services, includingNetflix. But Disney has quickly become one of the biggest streaming providers. The company’s Disney+ platform, launched just last November, has already signed up more than 60 million subscribers.
“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,” Chapek said in a statement.
Source: Read Full Article