Walt Disney restructures entertainment businesses to boost streaming

By Lisa Richwine (Reuters) - Walt Disney Co said on Monday it had restructured its media and entertainment businesses to accelerate growth of Disney+ and other streaming services as consumers increasingly gravitate to digital viewing. Under the reorganization, Disney will separate the development and production of programming from distribution to be more responsive to consumer demands. The move came days after activist investor Daniel Loeb of hedge fund Third Point urged Disney to forgo a dividend payment and double its programming investment in streaming

Reuters October 13, 2020 06:05:53 IST
Walt Disney restructures entertainment businesses to boost streaming

Walt Disney restructures entertainment businesses to boost streaming

By Lisa Richwine

(Reuters) - Walt Disney Co said on Monday it had restructured its media and entertainment businesses to accelerate growth of Disney+ and other streaming services as consumers increasingly gravitate to digital viewing.

Under the reorganization, Disney will separate the development and production of programming from distribution to be more responsive to consumer demands.

The move came days after activist investor Daniel Loeb of hedge fund Third Point urged Disney to forgo a dividend payment and double its programming investment in streaming.

Disney shares rose nearly 5% in after-hours trading to $130.76.

The media and theme parks company launched the Disney+ streaming service in November 2019. It has exceeded its own targets by drawing more than 100 million streaming customers worldwide to Disney+, Hulu and ESPN+.

Streaming pioneer Netflix Inc boasts 193 million, but has built that customer base over the 13 years.

Loeb had argued that Disney needed to cut its dividend to increase spending on new TV shows and movies to sign up new customers more quickly.

Disney Chief Executive Bob Chapek, in an interview with CNBC, said the company is planning to increase investments in content but he did not say if it was prepared to cut its dividend to finance the strategy.

"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, who took the company's top job in February, said in a separate statement.

In a statement on Monday, Loeb welcomed Disney's revamp of its media and entertainment structure.

"We are pleased to see that Disney is focused on the same opportunity that makes us such enthusiastic shareholders: investing heavily in the (direct-to-consumer) business, positioning Disney to thrive in the next era of entertainment," Loeb said.

Under the changes, Disney's studios, general entertainment and sports business would come under one division while distribution and commercialization would fall under a separate global unit.

Disney said its creative teams would develop and produce programming for streaming and traditional platforms, and the distribution group would decide where customers would see it.

Chapek told CNBC there would be layoffs as a result of "centralization" of functions but did not say how many.

Kareem Daniel, formerly president of consumer products, games and publishing, will oversee Disney's new media and entertainment distribution group, the company said.

Alan Horn and Alan Bergman will continue to head Disney's studio operations, which will manage programming from big franchises including Marvel, Star Wars, Disney animation and Pixar. Peter Rice will run general entertainment programming and Jimmy Pitaro will oversee sports.

AT&T , which debuted the HBO Max streaming service in May, reorganized in August to combine its film and TV operations under one studio head to better compete in the streaming media wars.

Disney said it would hold an investor day on Dec. 10 to provide more information about its strategy.

(Additional reporting by Helen Coster in New York and Ankit Ajmera in Bengaluru; Editing by Aurora Ellis, Sam Holmes and Cynthia Osterman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.