After pulling more than 50 TV series and movies from Disney+ and Hulu at the end of May, Disney reported a record $1.5-billion impairment charge for its June quarter.
In the Securities and Exchange Commission filing, the company also said that it could incur additional impairment charges of up to $400 million, because it is continuing to review the content on the streaming services and expects that “additional produced content will be removed from its DTC and other platforms,” mostly during its third fiscal quarter.
The content already removed by Disney includes TV series such as “Willows” and “Dollface,” and movies including “The One and Only Ivan” and “The Mighty Ducks.”
Reducing the value of its content assets will allow Disney to reduce its taxes.
In its quarterly earnings call in May, CFO Christine McCarthy told analysts that Disney expected to take a $1.5-billion to $1.8-billion write-down in its June quarter.
“We are in the process of reviewing the content on our services to align with the strategic changes in our approach to content curation,” she said.
As part of its push to slash costs, Disney, which spent $33 billion on content last year, plans to cut $3 billion this year. The company is confident that “rationalizing” the volume of content produced and costs are “the right path for streaming’s long-term profitability,” CEO Bob Iger said.
Disney also plans to launch an integrated Disney+/Hulu app option, and raise Disney+ subscription prices, sometime this year.
As the early 2024 deadline for Disney's acquisition of Comcast's 33% stake in Hulu approaches, Comcast has reportedly stopped paying costs related to Hulu and the companies are in arbitration over the value of the streaming platform.