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Disney is reorganizing itself to focus on its streaming business

Disney is officially going all-in on streaming. Just yesterday, the company announced that it would be undergoing a massive reorganization that would bring its media and entertainment business to focus on developing content for its streaming and broadcast services.

Moreover, Disney’s media businesses, ads and distribution, and Disney+, will now operate under the same business umbrella. This major reorganization announcement comes just a few days after investor Dan Loeb called on the company to cancel its dividend and redirect more investments into streaming.

Wall Street clearly gave the entertainment company its blessings, with Disney shares going up by almost 6% in after-hours trading.

So, what triggered the company’s decision to reorganize for the sake of its streaming service anyway? The short answer: COVID-19. With the pandemic resulting in global lockdowns, Disney had to witness the collapse of its theatrical release business and a barrage of production issues. On the flipside, all the months spent quarantined inside their homes pushed more and more people towards streaming options, and Disney+ was naturally one of the most sought-after services.

The reorganization, therefore, has rescheduled theatrical releases of movies such as Black Widow, while other movies like Mulan and Pixar’s upcoming creation Soul, have been moved to Disney+.

According to Disney CEO Bob Chapek, the reorganization is expected to boost the company’s growth and enable it to become more effective in terms of creating what the consumers want.

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,” he wrote in an internal memo to the company.

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Hamza Zakir

Platonist. Humanist. Unusually edgy sometimes.

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Hamza Zakir

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