Earlier this week during an earnings call, Disney CEO Bob Iger and Disney CFO Christine McCarthy both indicated that there will be content that is pulled from Disney’s streaming services. This comes as Disney continues to evaluate its long-term strategy toward profitability with its streaming services, also known as Direct to Consumer (DTC).
“We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation,” said McCarthy
“As a result, we will be removing certain content from our streaming platforms, and currently expect to take an impairment charge of approximately $1.5 to $1.8 billion. The charge, which will not be recorded in our segment results will primarily be recognized in the third quarter as we complete our review and remove the content.”
While specific titles weren’t announced, McCarthy said that “going forward, we intend to produce lower volumes of content in alignment with this strategic shift.”
Iger also talked about the plan moving forward and noted that a lot of money had been spent on content creation and marketing that hadn’t led to an increase in subscriptions. He said that moving forward Disney would be “getting much more surgical about what we make.”
In his words, Iger explained that “When you make a lot of content, everything needs to be marketed. 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.”
Iger also commended the theatrical releases and tentpole films as subscription drivers. “But we were spreading our marketing costs so thin that we were not allocating enough money to even market them when they came onto the service. Coming up, Avatar, Little Mermaid, Guardians of the Galaxy, Elemental, etc. where we actually believe we have an opportunity to lean into those more, put the right marketing dollars against it, allocate more basically away from programming that was not driving any subs at all.”
During the earnings call, Iger also announced that prices will be going up for Disney+’s ad-free tier. Later in the year, a one-app solution will also be offered for those who subscribe to both Disney+ and Hulu.
What do you think about Disney+ and Hulu scaling back on its content? Do you have any predictions on what will be removed? Is there anything you hope won’t? Share your thoughts and opinions in the comments below!
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