Disney is restructuring its media and entertainment divisions, as streaming becomes the most important facet of the company’s media business.
On Monday, 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+.
Disney CEO Bob Chapek said, “I would not characterize it as a response to Covid, I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway.”
I would definitely characterize it as a response to COVID. Avengers: Endgame made 1.2 billion with a “B” dollars on its opening weekend last year. Three days! $1.2 billion!
Endgame‘s box office total was $2.79 billion. Tenet, meanwhile, just passed $300 million — what a difference a pandemic makes! I don’t believe for a second that Disney was going to transition away from those kinds of numbers to a streaming-centric view anytime soon. This new power the studios have over the theaters only exists because an incompetent president released a pandemic on America. Before Trump, the movie theater box office was richer than ever. Maybe it’ll take a few years before we have another Endgame-like theatrical experience, but it’ll eventually happen.