The modifications, created as a result of plummeting revenues, will consist of a new distribution division and revamped content groups focused solely on streaming.
The Walt Disney Co. revealed plans to restructure its media and entertainment businesses. The changes consist of a new distribution division and improved content groups who will prioritize the company’s streaming operations. “Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value,” CEO Bob Chapek said.
The changes stemmed form Disney's declining revenues at its theme parks and movie divisions as a result of the pandemic. It follows similar moves by companies including NBCUniversal and WarnerMedia that have seen cuts made as streaming dominates the market. The announcement was made days after activist investor Daniel Loeb urged Disney to forgo a dividend payment and double investment in streaming. “I’m honored to be able to lead this new organization during such a pivotal and exciting time for our Company, and I’m grateful to Bob for giving me the opportunity,” Loeb said.
Despite the modifications, Josh D’Amaro will still be in charge of Disney’s parks, experiences, and products segment. Rebecca Campbell will continue to serve as chairman, international operations, and direct-to-consumer, with responsibility for coordinating and integrating activities in different markets. Former CEO Bob Iger will also continue as executive chairman, overseeing the company’s creative decision making.
With over 100 million people subscribed to services like Disney+ and Hulu around the world, news of the restructure saw Disney’s shares jump up by 5%, though the company said that it will only start reporting under this structure in Q1 2021. Shareholders like Third Point’s Dan Loeb have urged the company to focus more on streaming. Loeb’s campaign didn’t spur Monday’s changes, which Chapek said have been in the works for months. The investor has also called for Disney to redirect its dividend money toward streaming, but the company already suspended the payout in July and hasn’t committed to future ones.
The conglomerate’s new model intends to act as an effective responder to consumer demands, pertaining mostly to a single media and entertainment distribution group set to be led by Kareen Daniel, who previously served as president of consumer products, games, and publishing. The changes will be further explained at an investor's day scheduled for 10 December.“Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it,” Chapek said.
Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it.” Bob Chapek CEO, The Walt Disney Co.