The Walt Disney Company is changing the way it’s managing its control over the happiest place on earth, both in the parks and on the screen, with the media production side having a new emphasis on streaming services like Disney+. The news comes from the Mouse House itself, which announced Monday that its broad structural reorganization will be effective immediately.
Hence Disney has created a new distribution group within their business structure, with the company streamlining all production verticals underneath the umbrella of Media and Entertainment Distribution. This group will be responsible for the development and production of content for the company’s streaming services, which include Disney+, Hulu, and ESPN+, as well as the profits and losses for ad sales generated by that content. This centralized Media and Entertainment Distribution hub will be overseen by Kareem Daniel.
This appears to be a major pivot by Disney toward the future, particularly given the current constraints placed on their business model due to the coronavirus pandemic. With Disney’s franchise-based theatrical movie content backed up into 2021, and potentially longer due to COVID-19 keeping movie theater attendance low—and theaters either closed or desperate for new content from wary studios—it is easy to imagine Disney looking to a future where they would be less reliant on theaters. However, at least in the short term, theatrical content is still a major priority for Disney.
Indeed, as part of the new mission statement, the Studios portion of the Media and Entertainment Distribution group will be expected to produce content for “theatrical, linear, and streaming distribution…” Although the same press statement states the focus is “the company’s direct-to-consumer outlets, which include Disney+, Hulu and ESPN+.” Alan Horn and Alan Bergman will continue to oversee Studios content output for Disney via Disney Pictures, Walt Disney Animation Studios, Pixar Animation, Marvel Studios, and Lucasfilm as chairmen, with both still reporting to Disney CEO Bob Chapek.
“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. “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. 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, including Disney+, Hulu, ESPN+ and the coming Star international streaming service.”
In the short term, it is hard to gauge how much this will change Disney’s current holding pattern on theatrical content due to the pandemic. Given the decision to delay Black Widow to summer 2021 after the Mulan PVOD experiment, one might suspect Disney is reluctant to put more blockbusters intended to be billion-dollar earners on streaming, which leaves the entire Marvel Studios catalog, for one example, in limbo. But in the longer term, Disney is unsurprisingly pivoting toward Disney+, which seemed to be the intention ever since the streaming service was announced as an implicit rival to Netflix.
Considering the new limitations COVID has introduced to entertainment corporations in regard to theatrical distribution, it is reasonable to speculate timetables for transitioning toward the vertical integration of streaming have been accelerated. So whether this has ramifications for consumers in 2021 remains to be seen. How it could affect the long-term future of Disney’s content creation, both in terms of scale and distribution, seems fairly significant.