In an attempt to accelerate the growth of Disney+ and other streaming services, Walt Disney Co stated that they have restructured its media and entertainment businesses.
This reorganization separates Disney’s development and production from distribution in order to respond quicker to consumer demand. Their studios, general entertainment, and sports businesses will be under one division and distribution and commercialization would be in a separate global unit.
After this announcement, Disney shares rose nearly 5% in after-hours trading to $130.76.
“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,” Disney’s Chief Executive Bob Chapek stated.
Chapek also told CNBC that they are planning to increase investments in content but he did not say if it was prepared to cut its dividend to finance the strategy. In addition, he said that there would be layoffs as a result of “centralization” of functions but did not say how many.
“Managing content creation distinct from distribution will allow us to be more effective and nimble”Disney CEO Bob Chapek
Keep an eye out for the company’s investor day on Dec. 10 to get more information about this strategy.