The Walt Disney Co. says it has reorganized its entertainment and media operations to fast-track growth of Disney+ and other streaming as they become the most valuable segment of the company's business.
Disney will concentrate on producing original content for its streaming services including Hulu, ESPN and Disney+ - including its "legacy platforms" - while the company's logistics and commercial activities will be consolidated into its media entertainment and distribution group.
Disney said it would divide content creation into three groups - general entertainment, studios and sports. Given the success of the company's Disney+ and its plans to speed up direct-to-consumer business, Disney said it was "strategically positioning our company to more effectively support our growth strategy and increase shareholder value," Kris 6 News quoted Walt Disney chief executive Bob Chapek saying.
Disney's move came days after Third Point activist investor Daniel Loeb called on the company to waive a dividend and double its capital in streaming.
The coronavirus pandemic has dealt a blow to Disney's theatrical business and led more consumers toward its streaming services. Shares of the California-based company climbed almost 5% in extended trading Monday to $130.76.
The company unveiled its Disney+ streaming service in November. Disney+ is its flagship subscription streaming service. Disney has surpassed its own targets by attracting more than 100 million customers worldwide to its prime streaming platforms. Netflix boasts 193 million customers but has generated this many subscribers over 13 years.
Disney is becoming more dependent on Disney+ as cinemas have been unable to bounce back after being closed in March because of the pandemic. Ticket sales have dropped since the industry tried a reopening in late August.
The company said it would conduct an investor day Dec. 10.
