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To prioritize streaming services, Walt Disney Co (NYSE:DIS) has significantly reduced its investment in traditional television networks, CEO Bob Iger revealed on Wednesday.
What Happened: Speaking at Moffett Nathanson’s 2024 Media, Internet, and Communications Conference in New York, Iger said that conventional mediums like ABC will continue to function as vital marketing avenues. They will enable the engagement of older audiences who aren’t tuning into series like “Abbott Elementary” on Disney’s streaming services, reported Reuters.
However, the company has reduced “pretty dramatically our investment in content specifically aimed at those traditional networks.”
“We feel comfortable with our hand right now, because we're using those networks efficiently and effectively,” he stated.
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Shows such as “Abbott Elementary” and “Grey’s Anatomy” are swiftly moved to Disney’s Hulu streaming service, where they attract a younger audience. This strategy allows Disney to spread costs across platforms, according to Iger.
“We’re basically aggregating greater audience, and we’re amortizing costs and we’re using the marketing of the traditional network, really, to help in some cases,” he said, adding, “We’re doing that across the board, Disney Channel, ABC, National Geographic, and it’s working.”
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Why It Matters: Disney’s second-quarter earnings showed a 1% year-on-year revenue growth to $22.08 billion, slightly missing the consensus of $22.11 billion. The company’s entertainment revenue declined by 5% year-over-year to $9.8 billion, while sports revenue grew 2% year-over-year to $4.3 billion.
During the earnings call, Iger announced a global crackdown on password-sharing, citing Netflix Inc. as the “gold standard” in streaming.
“We're heartened by the results that Netflix has delivered in their password-sharing initiative and believe that it will be one of the contributors to growth,” he said then, adding, “I think it's also important to note, Netflix is in many respects a gold standard when it comes to streaming.”
Photo Courtesy: Shutterstock.com
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
