Disney is Restructuring Media and Entertainment Divisions

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Disney’s CEO Bob Chapek told CNBC’s Julia Boorstin on “Closing Bell” on Monday that Disney is restructuring its media and entertainment divisions effective immediately.

In the interview, Chepek said that their goal is to further accelerate its direct-to-consumer marketing strategy. From this point on, they will be centralizing their media business into one single organization including content distribution, ad sales, and Disney+. Disney is restructuring its media and entertainment divisions, as streaming becomes the most important facet of the company’s media business.

Within hours of the announcement, shares of the company jumped more than 5%.

“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.”

According to Chapek, the reorganization could result in additional layoffs from the company but not to the extent of the park’s division which topped off at around 28,000. Kareem Daniel, the former president of consumer products, games, and publishing now oversee the new media and entertainment distribution group.

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.

“Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value,” Chapek said in a statement announcing the reorganization. “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.”

Source: CNBC