Beyond the ESG issues and the Nelson Peltz Board Challenge, Disney has other issues that are putting it in a very rough spot. Many are the doing of Iger himself. Now can he return to fix them?
You’re going to hear a lot about restructuring at The Walt Disney Company, along with layoffs, in the very near future. Robert Iger is in a difficult situation now that he’s back to take control of the House of Mouse. Perhaps the strangest thing is that it’s much of his own doing. Throwing away all of that secondary market for physical media releases (remember Blu Ray, DVDs, VHS, etc?) is coming back to haunt the company. Whereas that was a constant flow of billions of dollars for the company in the past, now it’s essentially gone. In its place is Disney+, a streaming service without much of a PVOD system, which gives access to nearly all of Disney’s catalog for a very low rate. On top of all that, Disney+ has a budget that is absolutely out of control… while Netflix eats Disney’s lunch on a far smaller expenditure.
Top 15 Streaming Content for 2022
- Stranger Things—Netflix
- NCIS—Netflix
- Cocomelon—Netflix
- Ozark—Netflix
- Encanto—Disney+
- Grey’s Anatomy—Netflix
- Criminal Minds—Various
- Bluey—Disney+
- Gilmore Girls—Netflix
- Seinfeld—Netflix
- Supernatural—Netflix
- Wednesday—Netflix
- Heartland—Netflix
- Cobra Kai—Netflix
- The Simpsons—Disney+
In the top slots, Disney has Encanto, Bluey and The Simpsons. Two of those are acquired properties, one with the largest number of seasons for any show in history. Other than a single runaway movie in Encanto, Disney+ is coming up very short of expectations. That’s especially true when you look at the installed base of Disney+. On top of that, the service seems optimally primed for young girls, and all small children tend to watch content over and over and over (see: Bluey and Cocomelon). So where are all the other Disney+ kids’ movies on this list?
When you consider that Netflix has half the budget of Disney+ ($17b v $33b), you can begin to understand just what a mess Disney is in. How in the world can they continue to double the budget of Netflix and have three entities in the top fifteen, two of which are acquired? Where is Star Wars? Where is Marvel? And don’t even start with me about how part of Disney’s budget is also their box office budgets… that just doesn’t hold water when Encanto, Lightyear and Strange World were all box office flops. If they’re not streaming entities, then it’s even worse from a financial standpoint. Add to that movies like Turning Red which were so poorly viewed by Disney that they pulled the theatrical run for a streaming-exclusive, and you can see that nearly all of that $33 billion is so intertwined with streaming that it can’t be disconnected.
It’s going to be an insane earnings report coming up for Disney in February. If Disney+ losses continue to top the billion-mark for the next quarter, there’s no way this company can continue to create the type of content that flounders this way.
Disney+ should be giving Netflix a run for their money. Instead, it’s just Disney’s money running away from Mickey’s coffers.
For all the latest news that should be fun, keep reading That Park Place. As always, drop a comment down below and let us know your thoughts!
