Walt Disney plans to close 100 international
TV channels this year, with most of that content to migrate to its Disney+ streaming service, CEO Bob Chapek said during Monday’s JPMorgan Chase & Co. technology and media conference.
“That continues to be a core strategy for us as we pivot toward direct-to-consumer,” he said in a Q&A.
Disney also closed 30 international networks, including the Disney Channel in the U.K., last year, and is “very pleased” by its success in converting consumers from that channel to its Star streaming brand in Europe by adding more adult content, he said.
The company also introduced Disney+ Hotstar in India last year.
Hotstar, which offers local content and cricket matches as well as standard Disney fare, added 6 million subscribers in the Disney quarter ended April 3, to total 34.5 million. That represents nearly a third of Disney+’s 103.6 million subscribers worldwide.
Last month, Disney shuttered several sports networks in Southeast Asia and Hong Kong.
The timing of shutdowns depends on individual-market contracts, and traditional TV network profits are helping to fund programming for
Disney’s streaming services, Chapek said.
Chapek was asked about Disney’s recovery from the hits its businesses took during the pandemic and the status of various sectors.
Disney has seen a strong recovery in its Asia-based parks attendance and expects low-double-digit growth in most other parks over the next several months, he reported—adding that its park in Paris has been given clearance to open on June 17.
Disney+ managed to reach 100 million subscribers despite COVID’s shutdown of most content production, and its momentum will be
facilitating both by the ability to restore full content flow by fiscal 2022 or 2023, and by the reopening of the parks, Chapek said.
“For the first time, we've got the opportunity to take our original direct-to-consumer business, which is our parks business, and use it for our newest direct-to-consumer business,” he said. “We've got a tremendous amount of information on our consumers from our parks business. What would happen if we mine that data to help [convince] people to subscribe to Disney+? It really gives us a big opportunity to take a leap forward on our D2C business.”
Chapek underscored that Disney used the pandemic shutdown period to “catalyze” its D2C plans.
“We've dramatically increased our investment in content based on [our] powerhouse brands and franchises,” he said. “We've now got an organization that's really built for this push towards direct-to-consumer, so that we can guarantee that we've got enough content flow regardless of whatever distribution channel we choose to employ on a particular piece of content.
"But we've also been working with international expansion and global scale… we've got a distribution model that's very flexible that can toggle either way, depending on consumer behavior or the state of recovery from COVID [in a given market].”
What has Disney learned from its various movie release models during COVID?
“One of the things we learned is flexibility is good, because there are two dynamics going on,” Chapek said. “One is people's willingness to return to theaters and theaters’ ability to return in a meaningful way. The second one is the change in consumer behavior that's happening naturally — with COVID probably acting as a bit of a catalyst, but it was going to happen anyway.
“Whether we're looking at a theatrical-exclusive window with a fairly dramatically shortened timing window between the first and second offerings, or whether we're looking at theatrical plus or Disney+ Premier Access, or whether we're looking at taking something directly to our [streaming] service, we're really celebrating that flexibility. We're trying to offer consumers more choice as they gain confidence [about returning] to theaters.”
Theatrical exhibition is important to Disney’s ability to extend its content franchises across parks, consumer products and other sectors, he stressed. However, while the international box office “seems to be recovering, at least in some markets,” the domestic market is still showing hesitancy, with no sign yet of a return to pre-pandemic, 2019 theater-going levels, Chapek said.
Decisions as to which distribution model to use for a given movie are part of a broader plan to ensure that all of Disney’s distribution channels — Disney+ in particular — have ample content to support retention and drive growth, he said.
With the family film “Luca,” Disney decided to debut it for Disney+ subscribers over the summer in hopes of repeating the success it had with driving new subscribers by releasing “Soul” on Disney+ during the holidays, Chapek noted.
“Again, flexibility is a good thing… [but] at some point, you've got to kind of step off the dock and on to the boat,” he added.