Updated: Dec 17, 2020
If there is anything that 2020's pandemic has left us with, it's a definite change in the way we consume content released by the entertainment industry. Since the inevitable halt of movie theater businesses and ceasing to leave our homes for simple luxuries, the phrase Netflix and Chill has become more of the safer and effortless alternative fix for tv and film consumption.
Not only does Disney recognize this, but they have adapted with Disney Plus and are focusing on to staying in the game! Disney is restructuring its media and entertainment divisions, as streaming becomes the most important facet of the company’s media business.
On Monday, the company revealed that in order to further accelerate its direct-to-consumer strategy, it would be centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+.
As of August, Disney has 100 million paid subscribers across its streaming offerings, more than half of which are subscribers to Disney+.
“I would not characterize it as a response to Covid, I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway.”
CEO Bob Chapek told CNBC’s Julia Boorstin on CNBC’s Closing Bell” Monday.
So what's exactly is changing?
As part of this reorganization, Disney has promoted Kareem Daniel, the former president of consumer products games and publishing. He will now oversee the new media and entertainment distribution group.
He’ll be in charge of making sure streaming becomes profitable, as the company continues to invest heavily in its various streaming products. Daniels will hold the reins to all of the company’s streaming services and domestic television networks, including all content distribution, sales and advertising.
Disney is becoming more reliant on Disney+ as movie theaters have been unable to recover after being shuttered in March due to the outbreak. Ticket sales have been particularly lackluster at domestic cinemas since the industry attempted a large-scale reopening in late August.
In recent months, the company pushed back a number of its theatrical releases including Marvel blockbuster “Black Widow.” The much anticipated Pixar film “Soul” has also been postponed. It will now arrive on Disney+ in December. Analysts are still awaiting word from Disney about how “Mulan” fared after Disney removed it from theatrical release and sold it through Disney+ for $30. It is expected the company will share more details about its performance during its next earnings report in November.
Daniel will be responsible, in part, for making big decisions about Disney’s theatrical and streaming release schedules going forward. ″[Consumers] are going to lead us,” Chapek said on “Closing Bell.” “Right now they are voting with their pocketbooks and they are voting very heavily towards Disney+. We want to make sure that we are going the way the consumers want us to go.”
This new structure is effective immediately. The company currently expects to transition its financial reporting to reflect these changes beginning in the first quarter of fiscal 2021.
Additionally, Disney announced that it will hold a virtual investor day on Dec. 10th, 2020.
We'll be expect all that new & juicy news from Marvel Studios then!