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Credit: DisneyFor some odd reason, Disney randomly purged some of its titles from streaming services such as Disney+ and Hulu. Though fans were increasingly upset that some of their favorite titles were randomly disappearing, the media company now feels the blowback for making such a drastic move.
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Huge titles such as Willow, The Mighty Ducks, The World According to Jeff Goldblum and The Mysterious Benedict Society were randomly deleted from viewing on Disney+. Hulu was also hit hard when it dumped Dollface, Little Demon, The Quest, and Y: The Last Man also joined in on being purged. Collectively, there were some 50 titles that were ranked from both direct-to-consumer streamers.
The company announced that this move was for cost-cutting purposes and the company could save somewhere between $1.5 to $1.8 billion on its tax bill by removing those titles from its balance sheet. CFO Christine McCarthy stated these facts during an earnings call. CEO Bob Iger also confirmed the company is “confident that we’re on the right path for streaming’s long-term profitability.”
However, though the move was meant to be a cost-cutting venture, the House of Mouse will now incur a massive penalty of $1.5 billion.
Disney Could Lose Up to $2 Billion
Based on an SEC filing on Friday, the company is set to incur a $1.5 billion impairment charge for removing streaming titles. The great purge at Disney+ and Hulu is reportedly not over, which could result in an additional $400 million impairment charge being stacked onto the company.
These charges are “to adjust the carrying value of these content assets to fair value.” We assume this means that the value of the shows and movies on the platform still needs to be paid their fair value for the rights being exchanged between Disney and the studios that produced them.
Either way, the cost-cutting venture that the company has enacted to save $1.5 to $1.8 billion could end up costing them somewhere near $1.9 billion. We are unsure how this works or why the company would want to purge these titles to save money when they also lose a staggering amount.
Then again, we would imagine that this is a proverbial drop in the bucket for Disney, as they can easily make $2 billion back between all the media companies under the umbrella of the House of Mouse. Iger also confirmed that the company would be raising the price of the Disney+ without ads tier, as it is “to better reflect the value of our content offerings.”
Considering Disney+ houses The Mandalorian, Ahsoka (coming soon), and a wealth of other huge titles everyone loves, people will accept whatever new charge Iger releases.
It has also been confirmed that Disney+ and Hulu are set to combine into a singular app by the end of 2023, and Comcast will “more than likely” sell its remaining 33% stake in Hulu to Disney. That $1.5 billion charge will likely be put back in the bank by next year.
Related: Disney Removes Failed ‘Lightyear’ Film From Streaming Platform
This company is a monster that can certainly take a $1.9 billion charge and not worry too much about it hurting the company. Hopefully, some new titles are coming to replace the huge amount that recently exited the apps.
Do you think Disney should have been charged more? Let Inside the Magic know in the comments down below!