May 11, 2023

Disney to scale back content production and withdraw existing programs from Disney+.

After revealing that Disney+ lost 4 million subscribers in the first three months of the year, company executives said they will begin removing content from the platform as a cost-cutting measure while continuing to realign its streaming strategy.

What will be cut - it's hard to say, as no one on the conference call mentioned the title names or even what programs will be removed.

According to CFO Christine McCarthy, Disney expects a write-down of $1.5 billion to $1.8 billion, which should appear on the company's books around the third quarter of this year. [Disney also plans to cut the amount of content it currently produces. According to CEO Bob Iger, Disney will be "more deliberate about what we produce." According to CEO Iger, Disney was spending a lot of money on producing and marketing content that would not have a significant impact on subscriber growth or retention." He explained that "they spend a lot of money on marketing that has no impact on revenue except negatively through marketing expenses.

Was any good news discussed on the call-Disney feels bullish about the effect theatrical films are having on Disney+ subscriptions. This is a feeling that has been expressed recently by several executives at major studios, and if it means that more (animated) films will be released theatrically, that's great. according to the CEO, Disney is taking some of the money that was being spent on marketing less popular content, They plan to redirect some of the money to promote the appearance of tentpole films on streaming platforms. Specifically, he cited "Avatar," "The Little Mermaid," "Guardians of the Galaxy," "Indiana Jones," and "Elemental."

Other notes from Cole:

Cartoon Brew's take: If this all sounds familiar, it's because Netflix and HBO Max made similar changes last year. The streaming bubble has burst spectacularly, and the once spendthrift management team has been on a trajectory of belt-tightening to recover from the debt incurred over the past few years.