The Walt Disney Co. scored a number of significant victories in 2019, including the release of “Avengers: Endgame,” the second-highest-grossing movie ever, and the debut of Disney+ with 10 million users on Day 1.
The company also made a significant $71 billion acquisition of Fox’s entertainment holdings.
These accomplishments demonstrated Disney’s capacity to utilize its intellectual property (IP) across a range of media, including streaming, theme parks, and movie theaters. After almost four years, questions have started to arise regarding the prudence of combining all of these assets under one roof.
Bob Iger, the CEO, has questioned if Disney has gotten too big for its own benefit. Even some Wall Street voices are calling for the union to end. The growth of Disney+ subscribers has slowed, the company’s linear TV segment is struggling, and the parks portion of Disney is beginning to show indications of slowing down.
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Disney’s Box Office Battle
A nine-year low in the price of Disney’s shares and underperformance when measured against the S&P 500 suggest that the studio may have trailed behind its rivals at the box office.
Michael Nathanson, a MoffettNathanson analyst, has questioned the organization’s structure and suggested splitting Disney into two separate companies, one focusing on parks, Disney+, and studio intellectual property, and the other covering everything else, such as linear networks, ESPN+, Hulu SVOD, Hulu Live TV, and Disney+ Hotstar.
At the results conference on August 9, Nathanson questioned Iger, “So why not make a clean break?” Iger emphasizes the analysis of strategic possibilities for ESPN and the linear networks while remaining mum regarding the company’s future organizational structure.
Disney’s development in the upcoming years will be fueled by three pillars, according to Iger: movie studios, theme parks, and streaming. Particularly, ESPN is getting ready to make the whole switch to a direct-to-consumer model.
However, analysts and media professionals caution that this path might be difficult, particularly due to the hefty price of sports rights and the possible pushback from customers who currently subscribe to various streaming services.
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Source: Yahoo
