Disney will be pulling content from streaming as it rethinks its costs and strategy, and is looking at a content impairment charge of $1.5 billion to $1.8 billion as it does so.
“We are in the process of reviewing the content on our DTC services to align with strategic changes in our approach to content curation,” said CFO Christine McCarthy on the company's post-earnings call.
“As a result, we will be removing some content from our streaming platforms, and currently expect to incur an impairment charge of approximately $1.5 to $1.8 billion. The charge, which will not be recorded in our segment results, will be recognized primarily in the third quarter as we complete our review and material removals.
He didn't specify any programming.
But, she said, “going forward, we intend to produce smaller amounts of material with this strategic change.”
McCarthy noted another upcoming $180 million charge for the remainder of the company's 2023 fiscal year (ending in September), which hit the previous quarter of $150 million due to severance. Disney is laying off 7,000 workers and said today it is on track to meet or exceed planned cost savings of $5.5 billion.
Pulling content from the service goes hand in hand with pushing less content, or, as CEO bob iger put it on the call, “being more surgical about what we create.” He said the company spends a lot of time and money creating and marketing content — or not spending enough on marketing — which doesn't always move the needle when it comes to customers. The push would be to lean toward specific content with the “right marketing dollars” – and away from programming that wasn't driving the sub. It is part of the maturation process as we grow. [Streaming] It's not a business we've never been in and we're learning a lot about it.
disney+ recently canceled willow And National treasure after a season
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