Disney CEO Bob Chapek yesterday announced a major restructuring of its media and entertainment divisions, as streaming becomes the most important facet of the company’s media business with Disney+ leading the way.
On Monday, the company revealed that in order to further accelerate its direct-to-consumer strategy, it would be centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+.
Shares of the company jumped more than 5% during after-hours trading following the announcement.
“I would not characterize it as a response to Covid,” CEO Bob Chapek told CNBC’s Julia Boorstin on “Closing Bell” on Monday. “I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway.”
“We are tilting the scale pretty dramatically [toward streaming],” Chapek said on “Closing Bell,” noting that the company is looking at all investments, including dividends, as it seeks to increase its spend on new content. Chapek said the board of directors will have the final say on Disney’s dividend payouts.
JUST IN: Disney announces a major reorganization, as streaming becomes the most important facet of the company’s business. “We believe that we’ve got the opportunity to build upon the success of Disney+,” CEO Bob Chapek tells @JBoorstin. https://t.co/fE1Gzo4hol pic.twitter.com/uxJw0Q5Y9z
— CNBC (@CNBC) October 12, 2020
With numerous Star Wars shows in development for Disney+, it will be interesting to see if this announcement changes anything in relation to future film productions. Sign up to Disney+ here.
