Disney Reduces Content Spending By $1 Billion

February 7, 2025 Roger Palmer

During the boom of the streaming wars, Disney was spending billions of dollars creating new movies and shows for its traditional linear channels and streaming services. Every studio was spending billions in a race to get as many subscribers as possible to catch up with Netflix and following the purchase of 20th Century Fox, Disney’s spending increased even further.

At one point in 2022, Disney was spending $33 billion on new content, which includes major blockbusters, hit shows, plus live sports for ESPN and news content from ABC.

For comparison, Disney has generally been spending around $27 billion each year on new content, as it was pushing to gain more subscribers with more original content to power their streaming services like Disney+, ESPN+ and Hulu.

Here’s a look at the recent content spending by Disney:

2018 – $23 Billion
2019 – $27.8 Billion
2020 – $28.6 Billion
2021 – $25 Billion
2022 – $33 Billion
2023 – $27 Billion

Following Bob Iger’s return as CEO in late 2022, he immediately embarked on a cost-cutting exercise that resulted in thousands of people being laid off from Disney and many projects being cancelled or scaled back. Especially as many of the studios like Marvel, Lucasfilm and Pixar weren’t able to maintain their high standards while churning out more shows for Disney+, resulting in some lackluster shows and films being released, that just didn’t click with audiences, either at the box office or in terms of viewership.

Over the past couple of years, we’ve seen Disney’s overall output of content drastically reduce, with fewer films and shows being released, though generally, the quality has been improving as more time has been spent making sure they hit Disney’s high standards.

This past week, Disney CFO Hugh Johnston took part in a quarterly financial results investor call and was asked about Disney trimming its content budget by a billion from $24 billion, to which he replied:

First, in terms of cost cutting, as a company, we’re focused constantly on identifying opportunities that where we’re spending money, perhaps less efficiently and looking for opportunities to do it more efficiently. That’s not a once a year thing. That’s not a once a month thing.

That’s something that we do every day of the year. It’s part of what a good management team does and we do think we’re a good management team in that regard. So we’re going to continue to identify opportunities to redeploy money in order to make the company both higher growth and ultimately more profitable.

With content spending dropping down to $23 billion in 2024, it brings its spending down to 2018 levels, which was before Disney+ launched.

Way back in 2019, Disney set out its plans to make Disney+ and its streaming business profitable by the end of 2024, which it has managed to do. Spending $10 billion less on content between 2022 and 2024 is going to make a big impact on the bank balance and accounts.

It’s also why it’s become very noticeable that the number of new originals being released on linear and streaming has drastically reduced in the past year or so. Reducing the amount of content being created is also going to help some of its established franchises, like Marvel and Star Wars, as fans have become worn out by too many releases. Disney has also been effective in bringing down the budgets on its projects, where it had spent over $200 million creating shows like “Secret Invasion”, for shows like “Echo” and “Agatha All Along”, the budgets were closer to $40 million.

Sports continues to be a major source of content spending, as licensing deals with major franchises like the NBA, NHL, and NFL make up a big chunk of that budget. However, these are often some of the most-watched live shows across all of Disney’s platforms, resulting in higher advertising revenue.

With Disney bringing its echo systems closer together with ESPN and Hulu content now appearing in Disney+, the need to spend billions of dollars on expensive originals has reduced. Disney has also streamlined its studios in many other ways, significantly reducing the amount of filler content to build up Disney+ and Hulu, instead investing its time in more established franchises and shows.

Roger’s Take: It’s been very noticeable that we’ve seen far fewer shows and films being released on Disney+, Hulu and linear channels in the past year. This isn’t likely to change moving forward as Disney tries to balance profitability. With Disney’s content combined from all of its different studios, they realised they didn’t need to spend so much.

The combination of Disney+ and Hulu together, which is likely not that far off, will further help bring costs down for the company. It’s unlikely we will ever return to the crazy spending of 2022, which was the height of the streaming boom before Wall Street decided it wanted profits, not more subscriber numbers.

What is annoying for many subscribers is how Disney is spending billions of dollars on new original content while leaving thousands of films and shows from their archive unavailable due to a variety of reasons such as quality, residuals, music rights etc. It would seem logical that Disney invest in bringing some of its lost content to its streaming service to help fill the gap while their original output is reduced, especially now the streaming service is heading toward profitability.

While many might argue that consumers are getting less content than in previous years, while having to pay for more, a more streamlined Disney output plan will hopefully deliver better quality, as Disney has shifted from the quantity to quality model, instead of chasing Netflix, which is spending just $17 billion a year on content. Balancing how much content is made is never going to be easy. Not enough, and Disney will see viewership engagement reduce, and subscribers churn, but spending too much will ultimately result in more price rises.