Earlier this week, Disney announced that they would restructure their business with a focus on streaming, and already this shift from theatrical releases to Disney+ content already seems to be paying off.
As reported by Deadline, Disney’s stock has already risen nearly 5%, with stock prices past $131, which is the highest the stock has been in almost a month. Still, this rise is lower than where the company began the year.
In a press release that Disney released on Monday, the company announced that the creation of content would be split into three groups – Studios, General Entertainment, and Sports. All leaders of these new teams will report to the Chief Executive Officer of The Walt Disney Company, Bob Chapek.
Chapek said in the press release, “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.” By focusing on this direct-to-consumer business, Disney can now essentially cut out the middle man of distribution through theaters and release their own content however they see fit. Not only does this focus on streaming include Disney+, Hulu, and ESPN+, it also includes their upcoming Star streaming platform which is launching overseas in 2021, as reported by The Verge. Disney hasn’t expanded much on what Star is, except it will not carry licensed content, but would include content from ABC, FX, Freeform, Searchlight and 20th Century Studios.
While company execs present this shift as thanks to the success of Disney+, it’s also clearly an attempt to adapt to these changing times. With many theaters still closed and Disney shifting the release of films that will come to theaters, Disney has had to get creative with their release schedule and how they distribute their films.
The first casualty of post-COVID-19 restructuring came with Pixar’s Onward, which was released theatrically in the United States on March 6, 2020, but after massive theater closures, the film was available only two weeks later for digital download, and was then put on Disney+ on April 3, 2020.
This also moved Disney+ to put Frozen II and Star Wars: The Rise of Skywalker on their streaming service far earlier than they had planned. In addition to this, it was announced that Artemis Fowl would debut on Disney+ instead of in theaters, as would Hamilton, which would come out a year-and-a-half earlier than expected. Recently, Disney+ placed Mulan on their service, but for an extra $30 price, which was reported to be a failure for the service.
This led to Disney announcing that another Pixar film, Soul, would start streaming on Disney+ exclusively on December 25, 2020. Despite all this, there seems to be no plans for Disney to release any of their Marvel films to Disney+. Our scoop, which has now been confirmed by other sources, indicates that the real obstacle there is Marvel head Kevin Feige, who’s resisting the company’s push towards abandoning theaters and moving towards streaming.
This change also comes after many movie theater chains like Regal and AMC are struggling to stay in business. Josh D’Amaro, Disney’s Chairman of Disney Parks, Experienced and Products also recently announced that approximately 28,000 domestic employees would lose their jobs at their parks, due to a disappointing reopening for Orlando’s Disney World and the studio’s inability to reopen their Disneyland park in California.