Disney is reorganizing its media and entertainment business by creating a new division that will separate the content creation and distribution process. Disney CEO Bob Chapek joins 'Closing Bell' to talk about how it is accelerating the transition of its company to become a direct to consumer priority business. He joins Julia Boorstin to discuss. Subscribe to CNBC PRO for access to investor and analyst insights on Disney and more:
cnb.cx/3dIH56NDisney is restructuring its media and entertainment divisions, as streaming becomes the most important facet of the company’s media business.
On Monday, the company revealed that in order to further accelerate its direct-to-consumer strategy, it would be centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+.
Shares of the company jumped more than 5% during after-hours trading following the announcement.
The move by Disney comes as the global coronavirus pandemic has crippled its theatrical business and ushered more customers toward its streaming options. As of August, Disney has 100 million paid subscribers across its streaming offerings, more than half of whom are subscribers to Disney+.
“I would not characterize it as a response to Covid,” CEO Bob Chapek told CNBC’s Julia Boorstin on “Closing Bell” on Monday. “I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway.”
“We are tilting the scale pretty dramatically [toward streaming],” Chapek said on “Closing Bell,” noting that the company is looking at all investments, including dividends, as it seeks to increase its spend on new content. Chapek said the board of directors will have the final say on Disney’s dividend payouts.
Only last week, activist investor Dan Loeb called on Chapek to end the company’s annual $3 billion dividend to divert more capital to new Disney+ content.
Loeb’s Third Point Capital is one of Disney’s largest shareholders and bought more shares earlier this year in support of Disney’s repositioning around Disney+, its flagship subscription streaming service.
Loeb told CNBC, “We are pleased to see that Disney is focused on the same opportunity that makes us such enthusiastic shareholders: investing heavily in the DTC business, positioning Disney to thrive in the next era of entertainment.”
Chapek said the reorganization could result in some reduction of staff, but not likely at the same scale as was seen at the company’s parks division last month. Disney was forced to lay off around 28,000 workers after it became clear that its Disneyland parks in California would not be reopening soon.
As part of this reorganization, Disney has promoted Kareem Daniel, the former president of consumer products, games and publishing. He will now oversee the new media and entertainment distribution group.
He’ll be in charge of making sure streaming becomes profitable, as the company continues to invest heavily in its various streaming products. Daniel will hold the reins to all of the company’s streaming services and domestic television networks, including all content distribution, sales and advertising.
Disney is becoming more reliant on Disney+ as movie theaters have been unable to recover after being shuttered in March due to the outbreak. Ticket sales have been particularly lackluster at domestic cinemas since the industry attempted a large-scale reopening in late August.
In recent months, the company pushed back a number of its theatrical releases including its Marvel blockbuster “Black Widow.” The much anticipated Pixar film “Soul” has also been postponed. It will now arrive on Disney+ in December.
» Subscribe to CNBC TV:
cnb.cx/SubscribeCNBCtelevision» Subscribe to CNBC:
cnb.cx/SubscribeCNBC» Subscribe to CNBC Classic:
cnb.cx/SubscribeCNBCclassicTurn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30:
www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube|shepsmith|podcast Connect with CNBC News Online
Get the latest news:
www.cnbc.com/Follow CNBC on LinkedIn:
cnb.cx/LinkedInCNBCFollow CNBC News on Facebook:
cnb.cx/LikeCNBCFollow CNBC News on Twitter:
cnb.cx/FollowCNBCFollow CNBC News on Instagram:
cnb.cx/InstagramCNBCFor info on the best credit cards go to CNBC Select:
www.cnbc.com/select/best-credit-cards/ #CNBC
#CNBCTV
Category :
Kids Channel
#disney#ceo#aims#accelerate#transition#direct#consumer#priority#company
