Heavy blow for cinema sector: Disney is going full for streaming

Disney’s film arm is having a harder time than ever as cinemas in many parts of the world remain closed due to corona. At the same time, Disney’s TV channels are seeing their revenues drop as many companies cut their advertising budgets and more and more households run out of cable TV. And the once profitable theme parks have become a drag since corona. Witness the 28,000 employees who were recently laid off. What has gained importance since the start of the corona crisis: the streaming services.

“A seismographic shift is underway in the market,” said Disney CEO Bob Chapek The Wall Street Journal. “And you can either lead or follow that shift. We have chosen to lead. And the focus will be on streaming, because that is the platform that best meets consumer demand. ”

Therefore, the entertainment company is reorganizing its entire structure and management team. All TV networks, film studios and streaming services now fall under one division called Media and Distribution. The streaming services Disney +, ESPN + and Hulu will also come under one manager. Bob Chapek claims the company is following the success of Disney +, and furthering Disney’s plans to be direct-to-consumeractivities.

“This is a big deal,” says professor of media economics Tom Evens (UGent). “It may not be limited to Disney either. Other players will also embrace this model. Especially when they notice that a giant like Disney is pushing such a strategy. ” Indeed, similar moves have already been seen at NBC Universal, AT&T Inc.’s and Warner Media, reports The Wall Street Journal.

Movie out of circulation

In the first place, this is bad news for the cinema world, which is seeing an important supply channel dry up. Disney recently announced that it is the new Pixar movie Soul will release on the streaming platform Disney +. The animation and family movie was set to hit US cinemas on November 20, but Disney has pulled the film out of classic circulation and decided to offer the title on its own streaming platform in the United States and other countries from December 25. In Belgium, the film can only be seen on the big screen at Film Fest Gent, as the end of the film festival.

In doing so, the group repeats the trick it has done with its live action film Mulan lashed out. Originally, the wide release of Mulan planned for March 27, but by then the coronavirus had the world in its grip. After the film was first postponed to July and then August, Disney eventually decided to cancel the cinema release altogether. Mulan can now also be seen on Disney + in most countries at an additional cost. In Belgium, the film will not be on the platform until early December.

“We are very disappointed with Disney,” said Thierry Laermans of the Federation of Cinemas in Belgium (FCB). “What was then announced as a one-off event under exceptional circumstances, continues now.” Laermans blames Disney for too much navel staring. “The American cinemas are closed, but the rest of the global screens are largely open. In fact, the audience is hungry. ”

The dependence on American blockbusters is immense in European cinema. “In our region, American films account for 75 percent of the visitors and income,” Laermans calculates. “But if there is no product, there is no audience.” He doubts whether Disney is right on his side. “Cinemas are the temples through which films start their careers.”

Not only the cinema sector is looking at this evolution with a squint. The classic television channels have also been in the trenches for a real streaming war for a while. The omnipotence of the major players makes the ammunition very precious: money and content.

Lockdownboost

“Disney + was ahead of its ambitious forecasts this summer with over 60 million paying subscribers worldwide,” said Tom Evens. And then the pandemic surge was yet to come: numerous lockdown measures shackled people to their homes and seats. The result: a new boost for streaming subscriptions. “Almost a quarter of families already have three subscriptions,” says Evens. “This usually includes a sports subscription, so there is still room for streaming services that offer a sufficiently differentiated offer. This requires an enormous supply of content. And a player like Disney is well armed with his wide tentacles. ”

From now on, the Disney film and television studios will focus on creating content that is optimized for streaming, and not just for cinemas and TV networks. Disney + now offers more than 500 movies and 75,000 TV episodes, including all six originals Star Warsmovies, eighteen Pixar movies, and the entire library of The Simpsons.

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