As part of Disney’s plans to cut back on spending, during today’s quarterly investors call, Disney’s interim CFO Kevin Lansberry revealed that next year, the company is expecting to spend $25 billion on content, which includes sports programming and that will be down from $27 billion from fiscal, 2023 and down considerably on Disney’s plan in 2022 to spend $33 billion on content.
The biggest reason for the cutback in spending is due to the Writers Guild of America and SAG-AFTRA strikes, which have caused some productions to be delayed or cancelled. Though the company is targeting a reduction in content of $4.5 billion.
This reduction also fits with Disney CEO Bob Iger’s plan to create less content and focus on a more curated original programming lineup. With most of the linear and streaming programming now being shared across all platforms, along with the merger of Hulu and Disney+, it means Disney doesn’t need as much content to spread around.
During the investor’s call, it was revealed that about 40% of that content spend is on sports, which would be around $10 billion, leaving $15 billion for entertainment.
Disney is cutting back on how many films they release, instead focusing on big films, with Bob Iger saying:
“it gives us the ability to dial back a bit on some of the spending and investment in series. And that blend of spending between films and series, we believe gives us an opportunity to increase our margins and grow the business.”
Content spending has been a significant issue for Disney, following a push to make streaming platforms more profitable and the studios realising they can’t continue to chase subscribers with new content, now they must make money, especially with linear networks income declining and box office numbers also lower than before the pandemic.
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