The company intends to invest in the creation of films and series for its Disney + digital platform
The entertainment ship Walt Disney announced on Monday the restructuring of its business to accelerate the growth of the video platform in streaming Disney + as consumers increasingly turn to digital viewing. As part of the reorganization, Disney will separate the development and production of its content from distribution to better respond to consumer demands.
The move comes days after activist investor Daniel Loeb, from hedge fund Third Point, urged Disney to forego dividend payments and double its investment in programming for its platform. streaming. Investors welcomed the changes and Disney shares rose almost 5% after the markets closed. Daniel Loeb has argued that Disney needs to cut its dividend to increase spending on the production of new TV shows and movies to win over new customers more quickly.
The CEO of the entertainment company, Bob Chapek, has declared on CNBC that there will be layoffs as a result of the “centralization” of functions, but has not said how many. This cut in the workforce would be the second announced by the company in recent weeks, after reporting the dismissal of 28,000 employees at its US amusement parks due to the pandemic.
The media and theme park company launched the Disney + streaming service in November 2019 and has already exceeded its own goals by attracting more than 100 million customers worldwide to Disney +, Hulu and ESPN +. For its part, Netflix, the pioneer of streaming, has 193 million, but has built that customer base over 13 years.
Bob Chapek has assured on CNBC that Disney is planning to increase investments in content, but has not said if it was willing to cut its dividend to finance the strategy. “Managing content creation differently from distribution will allow us to be more efficient and agile when it comes to making series and movies that consumers want delivered the way they prefer to consume them.”
In a statement Monday, investor Daniel Loeb welcomed the renewal of the company’s structure. “We are pleased to see that Disney is focused on the same idea that we are excited about: investing heavily in the business. [directo al consumidor], positioning Disney to grow in the next era of entertainment. “
With the changes in the Disney studios, entertainment and sports content would become part of a single division, while distribution and marketing would be handled by a separate global unit. Disney has stated that its creative teams would develop and produce the programming for streaming and traditional platforms, and the distribution group would decide where customers would watch it.
Telecommunications multinational AT&T, which launched the HBO Max streaming service in May, also reorganized in August to combine its film and television operations under one command and better compete in the war to lead the market in the world. streaming.