It goes without saying that the film industry got hit with a bomb this year in the form of COVID-19. The closing of theaters has forced studios and production companies to make serious decisions, and while effects have been evident in the short term, the ripple effect is expected to last for years. Prognosticators can only guess what's going to happen in the near future, but one business that's taking proactive action is the Walt Disney Company, as it was announced today that a corporate restructure is developing in the media and entertainment divisions that will see a more concentrated focus on streaming content.
According to CNBC, the corporation is looking to push its direct-to-consumer strategy, and in the effort to make that happen it has formed a new organization that will control content distribution, ad sales, and Disney+ under one roof. Speaking about the shift, CEO Bob Chapek said in an interview that the move isn't a direct result of the impact that the on-going pandemic has had on the entertainment industry, but instead one that is essentially hastening what was already their long-term plan. Said the executive,
I would not characterize it as a response to Covid. I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway.
It goes without saying that this move is likely going to seriously spook the movie theater industry – and the timing isn't particularly great given how it was just announced in the last week that the upcoming Pixar movie Soul will be skipping domestic theatrical distribution and instead will be made available to Disney+ subscribers starting on Christmas Day.
The particular significance of it being Disney making this move is the fact that no other studio has had the kind of success that they have had in the last decade with blockbuster releases. Between Marvel Cinematic Universe movies, Star Wars, Walt Disney Animation titles, Pixar, and the series of live-action remakes of animated classics, there are few companies regularly producing nine-figure global releases. There's no expectation that the House of Mouse will totally give up on the big screen experience for their biggest movies, but close eye will be kept on how this restructuring influences their larger development strategy for new projects.
Disney's different streaming services, including Disney+, Hulu and ESPN+, have 100 million paid subscribers, and that number is only expected to grow as more high profile releases become available (such as The Mandalorian Season 2, which will start airing at the end of this month, and the MCU's WandaVision, which is expected in December). Disney+ in particular has been a game-changer since its launch last year, and it looks like its influence on the industry is only just starting.
