Not long after Mulan, Hamilton, and Soul were shifted to Disney+, the company has announced a reorganization to focus primarily on streaming services.
To accelerate the shift
In 2019, Disney became the first film studio to exceed $10 billion at the global box office ($11.1b for Disney, $13.2b including 20th Century). Disney will collect 50-60% of that, according to estimates, while the rest will go to theaters.
The potential in streaming, however, is much greater, perhaps best illustrated by the fact that Netflix's annual revenue in 2019 surpassed $20 billion (2019 report). In 2016, a rapidly growing 'home entertainment' segment surpassed global box office for the first time.
The Walt Disney Company is now reorganizing, effectively immediately, to "further accelerate the company’s direct-to-consumer strategy, in light of the rapid success of Disney+". It follows that its theatrical business will no longer have top priority and that its disc business will be a side thing – if even that.
- "Under the new structure, the Company’s three content groups will be responsible and accountable for producing and delivering content for theatrical, linear and streaming, with the primary focus being the Company’s streaming services," announced The Walt Disney Company.
Also read: Netflix to challenge Disney with 'several big animated films' per year
Disney has 100 million paying subscribers across its three streaming services; Disney+, Hulu and ESPN+. Disney+ launched less than a year ago and has already surpassed 60 million subscribers. Hulu/Star will launch internationally in the coming years.
CEO Bob Chapek did not attribute the reorganization to the coronavirus situation; it just accelerated a shift that was going to happen sooner or later.
- "I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway," said CEO Bob Chapek to CNBC. "We are tilting the scale pretty dramatically (toward streaming)."
The company will reveal more details about its plans on December 10, 2020. Soul will also premiere on Disney+ in December.
- Source: Disney, CNBC