Disney has reorganised its operations to put a higher priority on streaming, days after activist Daniel Loeb urged the world’s largest media company to invest more in the business that Netflix has pioneered.
Disney said it would separate content production from distribution, with an eye towards making television shows and movies to feed into its streaming services. The news sent Disney shares up more than 5 per cent in after-hours trade.
The company said its content groups for film franchises, general entertainment and sports would be led by the same executives who oversaw them in the old structure.
A single distribution arm, to be led by Kareem Daniel, would decide where to put these shows and movies, “with the primary focus being [Disney’s] streaming services”.
Mr Loeb last week called on Disney to divert the $3bn it pays in annual dividends towards making content for its streaming service. Mr Loeb urged Disney to devote its best content to its streaming service and embrace the shift away from cinemas, which he likened to horse-drawn carriages.
Streaming has been the sole bright spot for Disney this year as the coronavirus pandemic ravaged its other business, such as theme parks, cruise ships and blockbuster movies. The company reported a $4.7bn loss in the quarter to June. The Disney Plus streaming service has drawn more than 60m subscribers less than a year after launching, although it is lossmaking.
Bob Chapek, chief executive, said splitting production from distribution would “allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it”. The changes would “increase shareholder value”, he said.
Disney’s reorganisation elevates the role of Mr Daniel, a company veteran who previously led Disney’s consumer products division.
Alan Horn and Alan Bergman will continue to lead Disney’s movies division, while Peter Rice, who heads television production, will become chairman of general entertainment. Jimmy Pitaro, the head of ESPN, will lead the sports group.