WALT DISNEY RESTRUCTURES BUSINESSES TO BOOST STREAMING
Walt Disney Co. said it had restructured its media and entertainment businesses to accelerate growth of Disney+ and other streaming services as consumers increasingly gravitate to digital viewing, Lisa Richwine reported for Reuters.
Under the reorganization, Disney will separate the development and production of programming from distribution to be more responsive to consumer demand. The move came days after activist investor Daniel Loeb of hedge fund Third Point urged Disney to forgo a dividend payment and double its programming investment in streaming.
Disney shares rose nearly 5% in after-hours trading to $130.76. The media and theme parks company launched the Disney+ streaming service in November 2019. It has exceeded its own targets by drawing more than 100 million streaming customers worldwide to Disney+, Hulu and ESPN+. Streaming pioneer Netflix Inc. boasts 193 million, but has built that customer base over the 13 years.
Loeb had argued that Disney needed to cut its dividend to increase spending. Disney Chief Executive Bob Chapek, in an interview with CNBC, said the company is planning to increase investments in content but he did not say if it was prepared to cut its dividend to finance the strategy.