Disney now has a serious business model problem. Broadcast TV is dying quickly. Between ESPN and ABC Networks, Disney will be hard-pressed to make a move in streaming, however.
A few months ago, ESPN made headlines with a massive layoff. Now Disney is back at it with ABC.
Variety is reporting a full 10% cut across the board because of the substantial overhead.
Disney-ABC Television Group will be reducing annual costs at the unit by 10% by the close of Disney’s fiscal year next month, with a restructuring of operations that is expected to include hundreds of layoffs.
Plans for cost-cutting measures across the group, which includes the ABC television network, ABC News, ABC Studios, the ABC-owned stations division, and entertainment cable channels including Freeform and Disney Channel, are still being developed. Disney-ABC sources tell Variety that no headcount for staff reductions has formally been determined and that details of the cost-cutting effort are fluid. But it’s clear that the effort will involve major staff cuts in order to reach the 10% cost reduction target.
And this dovetails perfectly with Disney’s announcement that it would be pulling back its content to launch its own streaming network.
Here’s the problem, however. By the time everyone balkanizes the industry into little streaming fiefdoms the consumer will be presented with less content for a higher price.
And in this day and age, you can pretty much guarantee that the results will be one or two subscriptions like Netflix and/or Amazon and that’s all people are willing to pay for.
ESPN wasn’t a value at the $6-10 per month it was costing people in their cable packages. It’s not going to be worth $14.95.
The same goes for Disney’s content. No matter how much of it you currently consume, if it means having to manage yet another account, another bill, another app, another bad interface, a lot of people are simply going to say, “Oh well, I really don’t need to watch season 20 of Grey’s Anatomy” or whatever the hell season they’re on.
At the end of the day there’s so much entertainment being produced who really has time to keep up with everything they want to watch when it first airs?
Not nearly as many as the studio heads think.
It doesn’t help that Disney has aligned itself with the worst elements of our political dialogue, alienating great swaths of its TAM (Total Addressable Market) with its incessant pandering to social justice because CEO Bob Iger is a jackass.
ESPN is in a death-spiral because Disney never depoliticized its internal culture when they bought it and ABC lo those many moons ago. ESPN has always been insufferably liberal, now it, like Google and Apple, think that market share gives them ideological power.
As Colin Kapernick proved to everyone.
They keep trying to do this to Star Wars and then the rough cuts come back and everyone wakes up and realizes this and Pixar are the only properties Disney owns people aren’t sick of. Marvel has peaked. ESPN is a mess. ABC is a black-hole.
I can barely keep up with the stuff that comes into my Netflix queue every month. I didn’t watch one of the DC shows this season on a week-to-week basis. Leaving aside that they weren’t great, it simply wasn’t a priority.
I know I’m not the only one with a recommended list from friends and family that would take me half a lifetime to get through. Oh, and there’s more being produced every day that is just as good if not better.
There are better things to do in this life than consume yet another overly-complicated take on Sherlock Holmes.
So, when you stop to think about where all of this is headed and this latest announcement by Disney, you realize The Mouse House is a lot more vulnerable than it looks. And if Disney is vulnerable because they don’t have a platform, what does that say about everyone else?