Disney is restructuring its media and entertainment divisions as streaming has become the most important area of its business under the crush of the coronavirus pandemic.
The Mouse House revealed Monday that in order to accelerate its streaming business, it would centralize its media business into a single organization that will be responsible for content distribution, ad sales and streaming provider, Disney+.
Shares of Disney jumped nearly 5 percent in after-market trading.
The move comes as the coronavirus has hammered the movie theater business and ushered in more consumers to stream content at home.
The new structure puts Disney’s streaming platforms, including Disney+ and Hulu, at the center of the business. Now, programming divisions, like the film and TV studios, will focus their efforts on feeding streaming services, not just movie theaters and TV networks, the company said.
The reorganization comes a week after activist investor Dan Loeb called on Disney Chief Executive Bob Chapek to suspend the Disney’s annual $3 billion dividend in order to invest more money to new Disney+ content.
Loeb’s Third Point Capital is one of Disney’s largest shareholders. In August Loeb bought more shares, and wrote a shareholder letter in support of Disney’s repositioning around Disney+.
As part of the reorganization, the current heads of Disney’s studio division, Alan Horn and Alan Bergman, will now oversee the movie content arm. Peter Rice, who oversees TV production for Disney, will become chairman of general entertainment content, while ESPN head Jimmy Pitaro will head the sports unit and report to Chapek.
“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,” Chapek said of the reorganization.
Source: NY Post
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