Seemingly absorbing some growing advice from industry pros, Walt Disney (NYSE:DIS) is announcing a major reorganization where it will be making streaming its “primary focus” for entertainment.
Shares are up 3.1% after hours.
The company will rearrange its media and entertainment divisions into a single organization responsible for content distribution, ad sales, and Disney Plus.
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“Under the new structure, Disney’s world-class creative engines will focus on developing and producing original content for the Company’s streaming services, as well as for legacy platforms, while distribution and commercialization activities will be centralized into a single, global Media and Entertainment Distribution organization,” the company says.
sell popcorn futures. This may be the end of Robin Vos.
This could be the end of the large movie theater chains. I always assumed was bound to happen due to streaming, but I didn’t think it would be this fast.
Studios don’t want to release movies because the largest US markets are locked down. Theaters need tentpole movies to bring in people. And many people still don’t feel safe in confined areas for long amounts of time. The movie that was supposed to drive people back was Tenet, and it couldn’t do that.
Personally, I am all for movies getting released directly to my home. Charge me $30 or $40 to buy it. I am fine with that. It sucks for all the employees of the movie theaters. But once COVID passes, people will start going back and there will be boutique movie theaters and experiences sprouting up.
We’ve seen theaters shifting to being an experience by including lounge chairs, alcohol, restaurants, etc. as a way to draw people out from in front of their 72″ screen. I agree that there will be a place for movie theaters, but more as a social venue than as a place to see new releases. I see more demand for nostalgic reshowings and movie marathons.
I also wonder what it does to the Hollywood structure. As you said, they have relied on the Blockbuster model to fund lesser projects. With production aimed to a broader, global, home-based streaming audience, the volume of product will become more important. Instead of relying on 3 or 4 home runs a year, they will need 45 singles. Remember that the business relies on subscription growth and renewals. For that, they need a reliable stream of attractive new content. But there isn’t a giant spike of revenue for a single movie. It will change which projects get approved and getting $300 million in funding for a single movie will be harder to come by.
I agree Owen. It will be difficult to get that 300M movie made. But those are few and far between anymore. Endgame was 350M. Most of the Marvel ones are probably 150. But, your point is taken.
Marvel is actually nailing exactly what many people want to see right now. A few movies, and then mini-series on Disney+. I assume lots of franchises will go that way.
We have already seen most of the small budget movies go directly to PPV or streaming. I think of the Miramax style movies from my youth, those are rarely in the larger chains anymore.
And FYI Owen, if you haven’t watched Ted Lasso yet. It is phenomenal. Wholesome, good, and extremely funny.