Joe Burbank/Orlando Sentinel/Tribune News Service via Getty Images)
Disney announced a major reorganization of several content and streaming businesses on Monday as the ongoing coronavirus pandemic hobbles many of its core revenue sources.
The restructuring prioritizes its content and distribution efforts around its streaming business.
A new centralized "Media and Entertainment Distribution" group will handle monetization and distribution for all of Disney's content, along with managing all streaming operations, while the actual content creation will be delegated to three distinct groups: Studios, General Entertainment, and Sports.
Media and Entertainment Distribution will be led by Kareem Daniel, formerly in charge of consumer products, games, and publishing. The three content creation groups will report directly to CEO Bob Chapek alongside the distribution team.
"Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it," Chapek said in a press release. "Our creative teams will concentrate on what they do best—making world-class, franchise-based content—while our newly centralized global distribution team will focus on delivering and monetizing that content in the most optimal way across all platforms."
Investors welcomed the news, sending shares of Disney up as much as 5% in late trading Monday. The stock has lost about 15% since the beginning of the year, as the pandemic forced Disney to abandon cruises, close many of its theme parks, halt movie production, and stop streaming most live sports.
Disney Plus, on the other hand, has been a breakout star of lockdown orders and more time spent at home. As of August, Disney had more than 100 million paying subscribers on its platforms, and over half of those were also customers of the flagship Disney Plus service.
Monday's move comes as some investors, including Dan Loeb's Third Point Capital hedge fund, called on the company to end its annual dividend and instead re-invest that $3 billion in streaming. However, Monday's news included no changes to that payment.
All of the changes will go fully into effect during the first fiscal quarter of 2021, Disney said. It will also host an investor day on December 10.
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