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Credit: Inside the MagicThe Walt Disney Company has confirmed it will be gutting Disney+ in a strategy to curb costs and invest in promising projects. This may mean the end for a lot of fan-favorite TV shows, but as of right now, no one knows what Disney+ content is going to be removed from the platform.
On the most recent Earnings Call from The Walt Disney Company, both Chief Executive Officer Bob Iger and Chief Financial Officer Christine McCarthy detailed the recent performance of the House of Mouse across all sectors. Disney Parks once again posted an increase in revenue, but Disney+ saw a 4 million loss in subscribers.
The streaming platform’s huge loss was partially down to the streamer’s Disney+ Hotstar offering in India and Southeast Asia losing the Indian Premier League (IPL) rights for the massive cricket nation. However, losses were also reported across North America and other territories. Iger said on his first Earnings Call after returning as CEO earlier this year that one of his main focuses would be increasing subscriptions and gaining a bigger market share in the crowded streaming arena.
Disney+ Content Curation is a BIG deal.
Content curation has seemingly been the top priority for Disney, and McCarthy outlined the company’s plan, saying, “We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation.”
The comments come as Disney recently canceled projects like National Treasure and Lucasfilm’s Willow after just one season each.
“As a result, we will be removing certain content from our streaming platforms, and currently expect to take an impairment charge of approximately $1.5 to $1.8 billion,” McCarthy said. “The charge, which will not be recorded in our segment results, will primarily be recognized in the third quarter as we complete our review and remove the content.”
The CFO added that “going forward, [Disney] intend[s] to produce lower volumes of content in alignment with this strategic shift.”
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This could mean tough losses for studios like Lucasfilm and Marvel Studios. Disney’s largest outputs of new content are Kathleen Kennedy and Kevin Feige’s, and not that long ago, the latter commented that the superhero studio is pulling back on content. This is no clearer than the slate this year, where, as of May 2023, only one television show — Secret Invasion — has a confirmed release date.
At one point, What If…? Season 2, Loki Season 2, Secret Invasion, Ironheart, Echo, and Agatha: Coven of Chaos were all rumored to release this year. That is no longer the case. And what is also interesting is that a report from 2021 stated that Marvel shows were a big hit with current users but did little to attract more subscribers. It seems nothing has changed.
Bob Iger echoed McCarthy’s sentiments on the fledgling streaming service, saying that Disney will be more “surgical” in its programming for Disney+.
“When you make a lot of content, everything needs to be marketed,” Iger said on the Earnings Call. “You’re spending a lot of money marketing things that are not going to have an impact on the bottom line, except negatively due to the marketing costs.”
The recently reinstated CEO brought listeners’ attention to the current, seemingly more profitable theatrical slate. Iger said that with movies like Avatar: The Way of Water (2022), the soon-to-be-released live-action remake of The Little Mermaid (2023), Guardians of the Galaxy Vol. 3 (2023), and the upcoming Disney Pixar movie, Elemental (2023), that marketing dollars can be used to get more subscriptions due to their popularity. This would be instead of throwing marketing dollars at projects that do not impact the bottom line in a positive way.
Iger called this ongoing learning a “maturation” process. Streaming is such a new component of the business model, and it isn’t unusual for these sorts of peaks and troughs to happen in the first few years of a new product, especially something as massive as The Walt Disney Company’s streamer.
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This cutback in content across the board may mean that fan-favorite franchises like Lucasfilm and Marvel Studios, which put out projects like Star Wars’ The Mandalorian and WandaVision, and Disney’s own original content, could see significant setbacks to their planned storytelling.
There is also the case of movies staying off Disney+ for a longer period of time. Last year, Marvel Cinematic Universe’s Doctor Strange in the Multiverse of Madness (2022) arrived on Disney+ just 42 days after its movie theater premiere despite netting the company close to $1 billion during its theatrical release. Whereas Ant-Man and the Wasp: Quantumania (2023), the widely-panned historically low-rated Marvel Phase Five opener, will drop 89 days after its big-screen debut.
If this strategy were to continue, it is likely Disney is hoping that audiences will invest in tickets for the theater as opposed to waiting out a couple of months to watch it at home.
The news of Disney+ content removal comes as Disney also announced it would merge Disney+ and Hulu into one app offering.
What are you hoping remains on Disney+? Let Inside the Magic know in the comments down below!