Disney is restructuring its media and entertainment divisions, as streaming becomes the most important facet of the company’s media business.
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+.
Shares of the company jumped more than 5% during after-hours trading following the announcement.
The move by Disney comes as the global coronavirus pandemic has crippled its theatrical business and ushered more customers toward its streaming options.
As of August, Disney has 100 million paid subscribers across its streaming offerings, more than half of whom are subscribers to Disney+.
“I would not characterize it as a response to Covid,” CEO Bob Chapek said. “I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway.”
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. Daniel 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 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 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.
