The Walt Disney Company announced a broad structural reorganization of its media and entertainment businesses Monday, in a move to ramp up and streamline its direct-to-consumer strategy. That involves the creation of the new Media and Entertainment Distribution group, which will oversee all content monetization and streaming operations. Kareem Daniel, most recently president of consumer products, games and publishing at Disney, will lead the unit.

The move comes just under a year after the launch of Disney Plus, which has since surpassed the 60 million subscriber mark.

Under the new structure, the studios will continue to develop and produce originals for Disney’s streaming services — which include Disney Plus, Hulu and ESPN Plus — and legacy platforms. Distribution and commercialization will now be centralized under the Media and Entertainment Distribution group.

“Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value,” said CEO Bob Chapek in a statement. “Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it. Our creative teams will concentrate on what they do best—making world-class, franchise-based content—while our newly centralized global distribution team will focus on delivering and monetizing that content in the most optimal way across all platforms, including Disney+, Hulu, ESPN+ and the coming Star international streaming service.”

Three groups will be responsible for producing content for film, linear TV and streaming services: studios, general entertainment and sports, under the purview of Alan F. Horn and Alan Bergman, Peter Rice, and James Pitaro. The reorganization is effective immediately, and Disney’s financial reporting will switch to the new structure in Q1 of fiscal

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Alexander Kirch/Dreamstime

Walt

Disney

announced on Monday that it’s restructuring its media and entertainment segments to place a greater emphasis on its growing streaming business. The company is in the midst of a transformation from a television and movie theater-driven distribution model to a direct-to-consumer business that would rival

Netflix.

Disney stock (ticker: DIS) was up 5.5% in after-hours trading on Monday.

Disney is creating a new unit that will be focused on commercialization and distribution of its movies, TV shows, and sports content: the Media and Entertainment Distribution group. Meanwhile the company’s studios will continue to churn out content, without a bias toward any one form of distribution.

Essentially, rather than making TV content, movie theater content, and streaming service content, Disney’s creators will just make shows and films, with a separate team deciding how to monetize them. The new distribution group will be led by Kareem Daniel, a 14-year Disney veteran who most recently served as head of games and publishing in the company’s consumer products business.

Disney will have three distinct content-production groups. First is studios, which includes Walt Disney Studios, Pixar, Marvel, and Lucasfilm, and will make movies and series for theaters and streaming. Second is general entertainment, composed of ABC, Disney Channels, FX, National Geographic, and others. Its focus will be on content for Disney’s streaming services like Disney+ and Hulu and its cable networks. Last will be sports, responsible for content for broadcast on ABC and ESPN and for streaming on ESPN+.

It will be up to Daniel and the distribution group to determine which path to consumers is best for each piece of content. That could mean skipping a theatrical debut for a film and bringing it directly to Disney+. Or it could mean an advertising and affiliate fee-supported run

(RTTNews) – Disney and Pixar’s animated family film ‘Soul’, which was due to be released in November, is skipping theaters and heading for an exclusive Christmas premiere on streaming service Disney+.

In the countries where Disney Plus is not available, Soul will be released theatrically, but a date is yet to be announced.

In a tweet, Walt Disney Studios said “Disney and Pixar’s Soul will be streaming exclusively on Disney+ on December 25th.”

The movie will now be available to Disney Plus’ around 60.5 million subscribers. The streaming service costs $6.99 per month.

The decision on Disney’s much awaited film after Mulan comes as theaters are struggling to remain open amid new restrictions following increase in COVID-19 numbers in many areas. Soul was initially heading for a June release, but was rescheduled for November 20 in U.S. theaters due to the pandemic.

Meanwhile, it is expected that Soul will not cost like Mulan, which was released on Disney Plus for an extra $30 for “premier access” video on-demand or VOD release.

In a statement, Disney said, “Over the last six months, marketplace conditions created by the ongoing pandemic, while difficult in so many ways, have also provided an opportunity for innovation in approaches to content distribution.”

Earlier this week, movie theater operator Cineworld announced its plans to temporarily suspend operations at all of its 536 Regal theatres in the US and Cineworld and Picturehouse theatres in the UK from October 8. The company then noted that studios have been reluctant to release their pipeline of new films, and without these, it cannot provide strong commercial films necessary for customers to consider coming back to theatres amid Covid-19.

Meanwhile, AMC Entertainment Holdings, Inc., the biggest operator of cinemas in the U.S., recently said it expects 520 of its roughly 600 theaters

Tina Fey and Jamie Foxx voice characters in Disney Pixar’s “Soul.”

Disney

Disney’s “Soul” will no longer debut in theaters. The new Pixar animated feature will instead arrive on the company’s streaming service Disney+ on December 25.

“We are thrilled to share Pixar’s spectacular and moving ‘Soul’ with audiences direct to Disney+ in December,” said Bob Chapek, CEO of The Walt Disney Company. “A new original Pixar film is always a special occasion, and this truly heartwarming and humorous story about human connection and finding one’s place in the world will be a treat for families to enjoy together this holiday season.”  

The move comes as Cineworld, which owns Regal Cinemas, has closed more than 500 theaters in the U.S. . That loss has forced Disney and other studios to rethink their distribution strategies.

Unlike Disney’s “Mulan,” which skipped theaters to go to Disney+ in September, it appears that “Soul” will be free as part of the traditional streaming on-demand service.

The movement of “Soul” from the calendar is yet another blow to movie theaters. Major cinemas have struggled since reopening in August as attendance has been low and a number of Hollywood blockbusters have postponed into next year.

The delay of “Wonder Woman 1984,” “Black Widow,” “No Time to Die” and more have left a gaping hole in the theatrical calendar. And there are fears that even more films could be pushed in the coming weeks.

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Activist investor Dan Loeb is urging The Walt Disney Company’s CEO Bob Chapek to halt its $3 billion annual dividend payment and redirect the funds towards content production and acquisition for its streaming service, Disney+, according to a letter Wednesday obtained by FOX Business.

Ticker Security Last Change Change %
DIS WALT DISNEY COMPANY 122.89 +2.04 +1.69%

“By reallocating a dividend of a few dollars per share, Disney could more than double its Disney+ original content budget,” Loeb wrote. “These incremental dollars would, based on our analysis, generate returns that are multiples of the stock’s current dividend yield by driving high life-time-value  subscribers to your [direct-to-consumer] platform.”

Besides bringing in additional subscribers, Loeb said “increased velocity of dedicated content production will deliver several knock-on benefits spread across your existing base including elevated engagement, lower churn, and increased pricing power.”

Loeb, who doubles as CEO and chief investment officer of hedge fund, Third Point LLC wrote that driving more subscriber growth, while reducing “churn” and increasing pricing will “present the opportunity to create tens of billions of dollars in incremental value for Disney shareholders in short order, and hundreds of billions once the platform reaches a larger scale.”

Churn is the rate at which customers stop subscribing to video services.

Disney announced in its third quarter earnings report in August that the streaming service had surpassed 60 million subscribers. Meanwhile, Disney-owned Hulu has surpassed 35.5 million subscribers and ESPN+ has surpassed 8.5 million subscribers.

Ticker Security Last Change Change %
AMC AMC ENTERTAINMENT HOLDINGS INC 4.04 -0.02 -0.49%

The letter comes as the coronavirus has prompted the acceleration of cord-cutting from traditional cable and has forced media companies to adapt to a new release model while the pandemic continues