April 23, 2021

Business Information

Disney Restructures To Focus On Streaming Services

2 min read
Walt Disney Co. (NYSE:DIS) has announced that it is restructuring its media and entertainment divisions...

Walt Disney Co. (NYSE:DIS) has announced that it is restructuring its media and entertainment divisions as streaming becomes the most important part of the company’s business.

The Mouse House has revealed that, in order to accelerate its direct-to-consumer strategy, it will be centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+.

Shares of the company jumped more than 5% in after-hours trading Monday following the announcement.

The move by Disney comes as the global coronavirus pandemic has crippled its theatrical business and pushed more customers to its streaming service. As of August, Disney had 100 million paid subscribers across its streaming offerings, more than half of whom are subscribers to Disney+, which launched a year ago.

Disney Chief Executive Officer Bob Chapek said the reorganization could result in some reduction of staff, but not likely at the same scale as was seen at the company’s parks division last month. Disney was forced to lay off 28,000 workers after it became clear that its Disneyland parks in California and Florida would not be reopening as planned.

Disney is becoming more reliant on streaming as movie theaters have been unable to recover after being shutdown in March due to the COVID-19 outbreak. Ticket sales have been particularly lackluster at domestic movie theatres 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 its Marvel blockbuster “Black Widow.” The much anticipated Pixar film “Soul” has also been postponed. It will now arrive on Disney+ in December.

Analysts are waiting to find out from Disney 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.

Additionally, Disney has announced that it will hold a virtual investor day on December 10 this year.

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