The Walt Disney Co. recently announced a “strategic restructuring” and over 7,000 layoffs as the company looks to maximize its profits and stem massive losses from its digital streaming service. In addition to the layoffs, the company is planning to cut $5.5 billion in costs.
“Our strategic restructuring will return creativity to the center of the company, increase accountability, improve results, and ensure the quality of our content and experiences,” Disney CEO Bob Iger said.
For Fiscal Year 22, Disney’s Direct-to-Consumer business, which includes its flagship streaming service Disney+, brought in over $19 billion dollars in revenue. However, during the same period Disney+ lost the company in excess of $4 billion.
In part because of the losses, Disney is planning to reorganize its movie and television studios under a new division titled “Disney Entertainment.” According to Iger, this move “will re-establish the direct link between content decisions and financial performance.”
This could be a subtle acknowledgement that many of Disney’s most “woke” films, have completely bombed at the box office, losing the studio hundreds of millions of dollars.
Last year, Walt Disney Studios Motion Pictures released the animated movie Lightyear, which the studio budgeted $200 million to produce. Additionally, studios generally spend tens of millions of dollars in print and advertisings costs to promote their films.
A film must make at least double its production budget in order for the studio to break even on their investment, since movie profits are split roughly equally between theaters and production studios.
Lightyear, which featured homosexual characters and subplots, grossed $226 million in theaters, meaning it likely lost Disney north of $100 million.
Then, Disney released the movie Strange World in November 2022. According to our movie review team at Plugged In, the main’s character’s homosexuality is “the crux on which this [movie’s] narrative revolves.”
In what is a pattern for Disney’s most agenda-drive shows, the movie bombed at the box office. Though the studio spent between $135 and $180 million to produce the film (not including advertising costs), Strange World earned only $73 million at the box office, once again likely losing Disney more than $100 million.
These deeply unprofitable films demonstrates that most American parents simply don’t want their children’s entertainment infused with an ideological agenda.
After being (re)hired by the company last November, Iger said that he would look to respect Disney’s audience more, and work to end the company’s political involvement.
“Do I like the company being embroiled in controversy? Of course not,” Iger said. “It can be distracting. It can have a negative impact on the company. And to the extent that I can work to quiet things down, I’m going to do that.”
Were those words just platitudes, meant to placate Disney’s frustrated audience and customer base? Or were those words indicative of a fundamental shift underway at Disney?
This news of the company’s layoffs, restructuring, and refocus on content and profitability could indicate that Iger intended them to represent the latter. But only time will tell.
If you want to learn more about the entertainment content your family is viewing, check out Focus on the Family’s free service Plugged In. The Plugged In team reviews movies, television shows, music, games, books and more. You can learn more about Plugged In here.
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