Disney Puts Streaming Center Stage in Major Restructure

The Walt Disney Company is reorganizing and streamlining its media and entertainment businesses to position its burgeoning and fast-growing streaming arm at the center of its entertainment future. As part of the restructure, the company will bring distribution and commercialization, including Disney ad sales chief Rita Ferro’s advertising sales team under the media and entertainment distribution group, which will also be responsible for Disney streaming services such as Disney+, ESPN, Hulu and a forthcoming international streamer that the company will premiere in 2021. Kareem Daniel, a 14-year Disney veteran who formerly served as president, consumer products, games and publishing, will now head up the media and entertainment division group, the company said. His purview will include distribution, operations, sales, advertising, data and technology for all of Disney’s content engines, as well as managing operations of Disney’s streaming services and the company’s domestic television networks. He will report directly to Disney CEO Bob Chapek, who took over earlier this year following former CEO Bob Iger’s decision to step down from the post. "Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our company to more effectively support our growth strategy and increase shareholder value,” Chapek said in a statement. "Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it. Our creative teams will concentrate on what they do best—making world-class, franchise-based content—while our newly centralized global distribution team will focus on delivering and monetizing that content in the most optimal way across all platforms, including Disney+, Hulu, ESPN+ and the coming Star international streaming service." Read More: Disney+ Rolls Out Remote Co-Viewing Option Ahead of Fall Premieres Under the new organizational structure, content creation across all of the company will fall into three groups: studios, general entertainment and sports. Alan Horn and Alan Bergman will serve as chairmen, studios content, overseeing theatrical and episodic content centered on Disney’s portfolio of franchises, including Lucasfilm and Pixar. Peter Rice will serve as chairman, general entertainment content, and will focus on general entertainment programming for distribution on streaming as well as on Disney’s cable and broadcast networks, including ABC, Freeform, FX and National Geographic. James Pitaro will serve as chairman, ESPN and sports content, overseeing live sports programming and non-scripted sports related content for ESPN+ as well as ABC and the cable properties. They will all work with Daniel on marketing and content creation, the company said. "As we now look to rapidly grow our direct-to-consumer business, a key focus will be delivering and monetizing our great content in the most optimal way possible, and I can think of no one better suited to lead this effort than Kareem,” Chapek said. “His wealth of experience will enable him to effectively bring together the company's distribution, advertising, marketing and sales functions, thereby creating a distribution powerhouse that will serve all of Disney's media and entertainment businesses." The restructure, which is effective immediately, will mean Disney will stop reporting its direct-to-consumer and international segment (DTCI) as a combined entity next year. That unit had previously fallen under the purview of one executive since its outset, and after chairman of international operations and direct-to-consumer Kevin Mayer abruptly left earlier this year to become the short-lived CEO of streaming app TikTok, it had fallen to Disney veteran Rebecca Campbell. In May, shortly after Mayer's exit, Disney had returned the ad sales division from DTCI to its Media Networks group. At that time, Ferro began reporting to Rice and Pitaro, the co-chairs of Disney Media Networks at the time. Under the new structure, she'll now report to Daniel. Campbell will remain chairman, international operations and direct-to-consumer, and will in this role coordinate and integrate activities across the various business units, reporting to Chapek. While she will continue to lead direct-to-consumer operations for Disney+, Hulu and ESPN+, Campbell will now report that part of her purview to Daniel. By the first quarter of fiscal 2021, Disney will report those two portions of the business separately in its quarterly earnings. The reorganization comes at an inflection point for Disney, which is preparing an international streaming service as its own burgeoning streamer Disney+ cleared 60.5 million subscribers in less than a year’s time. Buoyed by early momentum, the company is looking to continue that growth with an international streaming brand and continuing to support streaming services Hulu and ESPN+, while still serving the numerous parts of its businesses that are rooted in the cable and broadcast television business. It also follows a flurry of reorganizations and restructures at other companies that are all trying to best position themselves to capitalize on streaming media’s growth. In August, WarnerMedia announced a stunning overhaul to put its streaming business anchored by HBO Max front-and-center. NBCUniversal also underwent a major shakeup the same month that also streamlined entertainment content creation under a single executive’s purview. The reorganization also comes as Disney is facing action from an activist investor, hedge fund Third Point, which is looking to pressure Disney to spend its dividend on developing programming for its streaming services. To address investor questions about its direct-to-consumer plans, Disney has planned a virtual investor day for Dec. 10, where it will share more information about its strategy going forward. Read Next: Disney’s Soul Will Debut on Disney+ Instead of in Movie Theaters