Disney+ Restructured and it’s NOT Going to Work
October 20, 2020
Hi, I'm Sean
20 years of finance experience and obsessed with high quality results.
We all know what Disney should do: ALL Content to ONE streaming service.
They continue to confuse customers with Disney+, Hulu, ESPN+ and soon to launch Star International, and continuing with cable/TV channels, movies in theaters, etc…
Decisions around where to distribute content and how to market will inevitably create internal conflicts.
Disney just announced a massive restructuring plan designed to accelerate their direct-to-consumer strategy, i.e. Disney+. It's the right direction, but it's too slow...
As a reminder Covid 19 nuked disney’s traditional businesses:
Have no fear Disney will return in full force. For reference see Hiroshima before/after below.
Lockdowns and sheltering in place propelled Disney+ subscriptions to over 60 million as of August. Downside is average revenue per subscriber is less than $5.00. For Netflix that number is over $13.00 in the US and Canada. Netflix is about a ¼ the size of Disney in terms of total revenue.
Bob Iger resigned as CEO right before Covid hit hard, but maintains the title Executive Chairman and he “will continue to direct the company’s creative endeavors”...whatever that means.
In his place as CEO is Bob Chapek, who previously led Disney Parks (some find it odd that a CEO was chosen that didn’t have extensive content and media experience)
So then, this week Chapek announces a management restructuring. Basically, Disney’s three content groups will focus on content creation and a new group will focus on content distribution.
The heads or Chairmans of these three divisions will report directly to CEO Chapek. And there is a new division:
In 12 Months:
Other fun facts:
Netflix market cap surpassed Disney again last week: $250 billion vs $230 billion.