Tuesday, May 28, 2024

Huge Job Cuts at Disney, What’s Next?

So many companies have taken the advances the internet has given and used them to shape a prosperous and bold new business model.

The streaming industry is one of the most considerable sections of the entire media industry. Disney+, alongside their competitors Amazon Prime, Netflix and Apple TV, is creating TV shows and movies in a bid to receive some of the colossal profits available in this sector.

Before the internet, in a land time forgotten, Blockbuster was the big hitter. You would go to Blockbuster, rent a video or DVD and then return it a few days later. However, the internet added a new dimension and completely changed the game.

Netflix was the first significant company to understand that a digital streaming approach would better suit this model and pivoted all of its efforts and resources into research and development.

We could name hundreds of companies that have changed forever due to widespread internet innovation and accessibility. One significant example is the casino industry. Many gambling operators no longer had to pay overhead costs like rent and electricity bills.

They simply set up online and made the most of having fewer overheads than their competitors. The internet also enabled these companies to use algorithms to settle bets, payout faster, and have more game rounds per hour. Blackjack online is just one of many casino games that have changed due to the internet – the game graphics, along with the accessibility of online platforms, have revolutionized the iGaming experience for good.

Although some still prefer the feel of a physical casino, the vast annual profits these providers regularly divulge show that it is a business strategy that works.

Significant Changes At Disney?

Streaming companies have enjoyed ample profits over the last half a decade. Some of the biggest companies in the world entered the space and spent millions per episode on their featured releases.

Many analysts wondered whether we were reaching a peak for streaming services. In addition, many Western economies are feeling the pinch of a cost of living crisis, and other economic issues, such as inflation, aren’t helping either.

The combined price of all top streaming services is upwards of $100 per month. Streaming services are often one of the first things trimmed from the budget, and Disney has realised this recently. It has been cited as the primary catalyst for the major job cuts announced this year.

Bob Iger is often cited as a revelationary CEO and has overseen the transition of Disney media through the 21st Century. There are many examples of his leadership generating significant profits for one of America’s and the world’s biggest entertainment companies.

Iger has been at the top of Disney for nearly twenty years. His ambitious plans opened the door to many incredible successful ventures when he acquired household names such as Pixar and Marvel.

Despite Iger stating on several occasions that streaming services are the future, it hasn’t been reflected on the bottom line of Disney’s balance sheet. According to figures, the Disney+ streaming service posted losses of nearly $1 billion in the last quarter of 2022.

Repositioning Disney As A Global Force

The difficulty with streaming is that the market has become saturated with entertainment. Dating back twenty years, TV series would take months to produce and advertise, and then episodes would be released weekly to generate a buzz.

In today’s age, the instant gratification which a generation of social media users has harnessed means that these companies will often have to produce shows and movies quicker. Consumers then binge-watch them in a smaller timescale.

This has caused a big race between Amazon, Disney, Netflix and Apple. With such a vast selection, many people are overwhelmed by choice. With many of these titles rushed into production due to hyper-corporate competition, it often produces relatively average products.

Conclusion

Given some of the statements Iger has released alongside the massive job cuts, he is veering his focus on streaming. With Marvel and Pixar under their banner, they also have legendary and iconic titles like Star Wars, so their springboard is incredibly positive.

One thing Disney does have over its competition is that it has these globally recognised brand names. The size of these brands generates mass hysteria. With a fresh instalment of both Toy Story and Frozen on the way, these movies can create hundreds of millions of dollars in profit.

So long as any new titles they release as part of these franchises are executed correctly, they could snatch a lead on other streaming networks that don’t have such marquee household movies under their service.

With Iger’s track record, it will be interesting to see how he handles this challenge. He hasn’t shied away from a challenge before and has often made the right calls at the right time to keep Disney’s global brand intact.

Only time will tell if this repositioning pays off but expect to see many more iconic Disney titles coming to your screens soon.

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