Disney shakes up its operations to put focus on streaming

Walt Disney Co., redoubling its push to become a global streaming giant like Netflix Inc., is shaking up its operations to refocus on the thriving Disney+ business.

The company is merging its TV networks, film studio and direct-to-consumer divisions into one big group it is calling Media and Distribution, Disney said on Monday. Existing content chiefs will continue to oversee their businesses, but they will now be directly able to choose what movies and TV shows air on Disney’s growing lineup of streaming services.

A new star, Kareem Daniel, who previously headed up consumer products within the theme-park division, will now take over distribution for the Disney+, ESPN+ and Hulu streaming services.

Investors applauded the move, sending Disney shares up as much as 5.5 per cent in late trading. Shareholders such as Third Point’s Dan Loeb have urged the company to put more resources into streaming. He sent a letter last week to Disney chief executive officer Bob Chapek saying it was time to move on from movie theatres, which he compared to horse-drawn carriages.

Though Disney may now have fewer divisions reporting their financials, the company intends to break out results to continue to give investors clarity about individual businesses. It plans to hold a virtual investor day on Dec. 10, following its quarterly earnings report on Nov. 12.

The changes underscore how important streaming is becoming to Disney and the whole media industry. Traditional TV networks such as the company’s ABC and Disney Channel are seeing viewers and cable-TV subscribers shift to on-demand services, including Netflix. But Disney has quickly become one of the biggest streaming providers. The company’s Disney+ platform, launched just last November, has already signed up more than 60 million subscribers.

“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.