Entertainment giant Disney announced that it would revamp its operations to focus more on streaming videos. The iconic company plans to restructure its media and entertainment divisions as the company produces more streaming videos for its customers.
Disney CEO Bob Chapek said that they would merge all its media businesses to create a single unit responsible for content distribution, Disney+, and ad sales. Chapek explained that the centralized approach would help the company accelerate its direct-to-consumer strategy.
The decision came as the impact of the pandemic is battering the entertainment industry. Disney’s theme park in Southern California remains closed while other Disneyland theme parks that reopened are getting less attendance than usual.
Chapek said that the reorganization is not a response to COVID-19. He added that what the pandemic did is to expedite Disney’s transition to streaming.
Disney’s Bright Spot
Analysts noted that streaming services are one of Disney’s bright spots as it navigates through a world disrupted by COVID-19. More consumers are streaming since most of them are staying at home due to the pandemic.
The entertainment giant said that Disney+, the company’s subscription-based video streaming service, benefitted from the global surge of streaming due to COVID-19. As of August this year, Disney said it has 100 million subscribers from its streaming services, with 60 million subscribers are on Disney.
Recently, Disney’s much-awaited release, “Mulan,” was removed from theatrical release as most theaters are operating on a limited capacity or temporarily closed. It decided to sell “Mulan” through Disney+ with a $30 charge. Analysts said that Disney has not yet released any figure on how the movie fared in the streaming service.
The reorganization will put Disney+ at the very core of the company. Various units of the company are shifting their focus in creating content for streaming. Chapek said that they focus their efforts on delivering content and optimally monetizing across different platforms.
Under the new structure, Alan Horn and Alan Bergman of Disney’s studio will handle the movie content unit. Peter Rice of TV production will head the general entertainment content, including Disney Channels, National Geographic, and ABC News. ESPN chief Jimmy Pitaro will lead Disney’s sports unit.
On the other hand, Kareen Daniel will oversee all operations, distribution, advertising, and sales in the movie, general entertainment, and sports contents.
Disney said that the new structure would help determine which platforms are best for television shows or movies. It added that the new organizational setup would take effect immediately, and the changes will be reflected in its financial reporting starting the fiscal year of 2021. The company plans to hold a virtual gathering of investors on December 10.