Just a few months after Warner Bros. Discovery began pulling titles from HBO Max as a cost-saving measure, The Walt Disney Company has announced that they will follow suit. Speaking during their latest quarterly investor call, Disney’s Chief Financial Officer Christine McCarthy confirmed the news, revealing that “will be removing certain content from our streaming platforms” in the coming months. She added that they are “in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation.”
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What content and from which of their services was not confirmed when the announcement was made. The only other elaboration offered by Disney with regard to removing some of their streaming content is that they expect a writedown to the tune of $1.5 billion to $1.8 billion sometime in Q3 of this year. In addition to simply removing some of the content from their services, McCarthy added that “going forward we intend to produce lower volumes of content in alignment with this strategic shift.”
Speaking during the Q&A portion of the meeting, The Walt Disney Company CEO Bob Iger was asked about the reduced output for streaming content. Iger revealed that Disney’s plans of arriving in the streaming sphere with the launch of hte service was done as a means for flooding “digital shelves with as much content as possible.” While that might have worked at first, the release of new content since then hasn’t always had the effect they wanted, including some that didn’t drive subscribers at all.
“As we grow the business in terms of the global footprint, we realized that we made a lot of content that is not necessarily driving sub growth,” Iger revealed. “And we’re getting much more surgical about what it is we make. So as we look to reduce content spin, we’re looking to reduce it in a way that should not have any impact at all on SOPs. We believe that there’s an opportunity for us to focus more on real sub drivers.”
Iger went on to reveal that marketing costs for their extensive expansion on content was also a drag on their bottom line. The main things that have driven subscriber growth however are the “big tentpole movies” released in theaters by the company.
“We were spreading our marketing costs so thin, that we were not allocating enough money to even market them when they came on the service,” Iger added. “As witnessed by the ones that are coming up including Avatar, Little Mermaid, Guardians of the Galaxy, Indiana Jones, Elemental, et cetera, where we actually believe we have an opportunity to lean into those more, put the right marketing dollars against it; allocate more from basically away from programming that was not driving any subs at all.”
(Cover Photo by Thiago Prudencio/SOPA Images/LightRocket via Getty Images)
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