The Walt Disney Company made quite the splash on Monday.
The company announced a massive reorganization of its media and entertainment business that will focus on developing productions that will debut on its streaming and broadcast services. And Disney’s media businesses, ads, and distribution, and Disney+ will now operate under the same business unit.
The move seems to have gone over well on Wall Street as the market share went up nearly 6% in after-hours trading. Disney’s announcement follows a significant reorganization of its release schedule to address new realities including a collapsing theatrical release business; production issues; and the COVID-19 pandemic. Bob Chapek, Disney’s chief executive in an internal memo announcing the reorganization, stated,
“This reorganization will accelerate our growth in the dynamic direct-to-consumer space, which is key to the future of our Company. The new organizational structure, with content creation distinct from distribution, will enable us to be more effective and nimble in creating what consumers want most, and delivering it in the way they prefer to consume it,”
“Under this new structure, our Company’s world-class creative engines will be able to focus wholly on developing and producing great original content.”
Chapek added,
“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,”
“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. Our creative teams will concentrate on what they do best—making world-class, franchise-based content—while our newly centralized global distribution team will focus on delivering and monetizing that content in the most optimal way across all platforms, including Disney+, Hulu, ESPN+ and the coming Star international streaming service.”
