You may have noticed that The Walt Disney Company has been in the news quite a bit lately. From company layoffs to being in legal battles with the Governor of Florida, the Mouse has been front and center in the news. I grew up watching Disney Channel and loving all the different kinds of shows Disney produced. Therefore, this latest news that I heard is quite shocking to me. In a surprising move, Disney CEO Bob Iger recently announced that the company is considering unloading some of its TV assets due to the struggles they have faced with their transition to streaming.
Disney’s Dominance in the TV Market
Disney has built an empire in the world of television, with its acquisition of major networks like ABC and ESPN, as well as its successful cable channels such as Disney Channel, Freeform, and FX. These properties have contributed significantly to Disney's overall revenue and brand recognition. The company's success in the TV industry has been driven by its ability to produce high-quality content and attract a large and loyal audience.
The Changing Landscape of Television
However, the television landscape has undergone significant changes in recent years. The rise of streaming services has disrupted traditional television models, with consumers increasingly opting for on-demand content over scheduled programming. This shift has led to a decline in traditional TV viewership and raised questions about the long-term viability of the TV business. TV is still a great medium and still achieves great results for a variety of clients. However, business models for TV need to be restructured in order to keep up with the changes.
Reasons Behind Disney’s Decision
Disney has been in a “restructuring” phase for months now, which has made Iger look at all of their challenges. Disney laid off thousands of employees and cut down their spending by billions. Disney also reorganized itself into three categories: Disney Entertainment, which includes most of its streaming and media operations; an ESPN division; and a parks, experiences, and product unit. Iger’s main task is to make Disney’s streaming profitable, mainly by pushing customers toward the ad-supported tier. Disney is even thinking of buying Hulu, since they already own 66% of it. Right now, Comcast owns the other 1/3 of Hulu. “The combination of those apps is designed to obviously help the [streaming] business become profitable,” Iger said.
It appears that ESPN TV is relatively safe and will be continued to be owned by Disney. That sports platform has been a consistent performer for the Mouse House and will only continue to grow.
Iger's announcement to consider unloading TV assets marks a significant shift in the company's strategy and reflects the changing dynamics of the television industry. As streaming services continue to reshape the way people consume content, Disney is making strategic moves to adapt and thrive in this new landscape. The repercussions of this decision will undoubtedly be felt across the entertainment industry, and only time will tell how it will ultimately shape the future of television.
Cate Bender, the author, is Project Coordinator of Marketing Keys