The repercussions around the sudden removal of Bob Chapek as the CEO of Disney, with his predecessor Bob Iger returning to the role, are continuing. We gave a breakdown of some of the discussions and speculation surrounding the events yesterday. We even discussed it on our Livestream.
A report in The Wall Street Journal, alleges that Chapek was implementing a strategy of moving production budgets toother outlets in order to make Disney+ seem more profitable.
According to the outlet, “people familiar with the matter” report that The Mysterious Benedict Society and Doogie Kamealoha M.D. are examples of content that was first aired on the Disney Channel so budgets for these projects, including all production and marketing costs, were not included against Disney+ budgets.
This made the streaming service look like it was performing better with original content. The report also alleges that Chief Financial Officer Christine McCarthy was concerned about this strategy, and voiced her concerns to the board.
Chapek had promised shareholders that the streaming portfolio (including ESPN+ and Hulu) would be profitable by 2024, however streaming in totality has lost $9 billion since the launch of Disney+ in 2019.
Leaving aside Chapek and the Disney issue, does this feel like a day of reckoning is approaching for streaming? A rapid market expansion led to proliferation, but very few are actually making money as they burn through capital in a content war. HBO Max is similarly rumored to be losing money. Paramount+ and Peacock have barely got moving. AppleTV isn’t really in the conversation. Netflix and Amazon have the history and the critical mass, but even Netflix has seen subscriber numbers decline. How much longer can the market sustain all the players?
The rot seems deep at Disney, with theme parks over-priced and undermaintained, growth stalling and movies losing money as middle America and global audiences turn away from clumsily inserted US-centric culture war issues being shoehorned into cartoons.
Can changing the guy at the top really make any difference?