Disney may have struggled with its parks and resorts due to the coronavirus pandemic, but its Disney+ streaming platform is doing quite well, even beyond what analysts may have predicted. The streaming platform hit 60 million subscribers in just a year of its launch. With this newly recorded success, the company is turning its sight to content streaming, according to a Monday announcement by executives, in what they termed strategic reorganization.
The new structure seeks to separate original content creation from distribution and commercialization, giving Disney ample opportunity to focus on creating content for its streaming services.
“The consumer’s actually going to be who’s going to make this decision,” Disney CEO Bob Chapek said. “They’re going to lead us with the way that they make their transactional decisions. And right now, they’re voting very heavily towards Disney+. And so, what we want to do is make sure that we’re going the way that consumers want us to go.”
Kareem Daniel will be playing a huge role in the new setup. He is the head of the new Media and Entertainment Distribution Group, including streaming platforms such as Disney+. This group will oversee the operations of the streaming platform and its domestic networks.
It is a huge promotion for Daniel, who once ran the company’s consumer products business. Fourteen years with Disney, he had helped manage several units of the company, including consumer products, games, and interactive experiences, publishing, studio distribution, and Walt Disney Imagineering. His newfound role involves finding ways to make consumers cough out the $30 subscription fee to stream content on Disney+.
While the coronavirus pandemic must have plunged Disney’s revenue from other sources, it was Disney+ that will come to the rescue. It began a hit for consumers who thronged the platform to catch up on movies and TV series produced by Disney, Pixar, Marvel, Lucasfilm, and National Geographic.
However, Chapek insists that the company’s new focus on streaming is not a response to the coronavirus as much as it is a benefit of it.
“I might say that COVID-19 accelerated the rate at which we made this transition. But it was going to happen anyway,” the CEO said.
The new structure takes effect immediately and will be reflected when the company submits its first-quarter report in February 2021.
Investors welcomed the reorganization. Disney’s shares went as high up as 5.5% immediately after the announcement was made. Dan Loeb’s Third Point, one of the biggest shareholders in Disney, applauded the move and said the company should invest more resources into streaming. In a letter he sent to the CEO Chapek, he said it was time the company moved on from the theaters and its sights on streaming.