Disney To Produce Less Content, Pull Existing Programming From Disney+
After revealing that Disney+ lost 4 million subscribers over the first three months of this year, company executives said that they will begin removing content from the platform as a cost-cutting measure while the organization continues to readjust its streaming strategy.
What’s being cut? That we can’t say, as nobody on the call mentioned any titles by name, or even what kind of programming would be removed.
What impact will these cuts have on Disney’s bottom line? According to CFO Christine McCarthy, Disney is expecting a writedown of $1.5 to $1.8 billion that should show up in the company’s books around Q3 of this year, “as we complete our review and remove the content.”
How will this impact production? Disney is also planning to cut back on the amount of content which it’s currently producing. According to CEO Bob Iger, Disney will be “much more surgical about what we make.” According to him, the company was spending too much money producing and marketing content that wasn’t making a significant impact on subscriber growth or retention. “You’re spending a lot of money marketing things that are not going to have an impact on the bottom line, except negatively due to the marketing costs,” he explained.
Was there any good news talked about on the call? Disney is feeling bullish about the effect its theatrical films are having on Disney+ subscriptions. It’s a feeling that several executives at big studios have expressed lately, and if it means more (animated) films get theatrical runs, that would be great. According to the CEO, Disney will reroute some of the money that was being used to market less popular content toward promoting the arrival of tentpole features on the streaming platform. He specifically mentioned Avatar, The Little Mermaid, Guardians of the Galaxy, Indiana Jones, and Elemental as titles that will get a marketing push ahead of their Disney+ debuts.
Other notes from the call:
- Executives said that the company is on track to meet or exceed the anticipated $5.5 billion in savings from laying off 7,000 employees. More extensive coverage on the layoffs can be found here.
- Disney+ and Hulu will soon be available in the same app, although each service will still be a separate subscription.
- The company plans to launch its Disney+ ad-supported tier in Europe by the end of the year, and Iger said he’s “bullish on our longer-term advertising positioning.”
- The loss of 4 million subscribers was largely driven by Disney+ Hotstar in India, which lost rights to the Indian Premier League cricket competition. In the U.S., Disney+ lost around 300,000 subscribers. In the rest of the world, however, the platform gained 900,000 subs. Both Hulu and ESPN+ also saw subscriber growth in early 2023.
Cartoon Brew’s View: If all of this sounds familiar, it’s because Netflix and HBO Max made similar changes last year. The streaming bubble has well and truly burst, and now we’re seeing a course correction with formerly spendthrift executives tightening their belts as they look to recover from debts incurred over the past several years.
Pictured at top: Still from the Mickey Mouse short “Carried Away” (2019).