Disney To Dramatically Reduce Investments In Traditional TV

Walt Disney will cut its investment in programming for traditional television networks pretty dramatically as the company navigates the consumer shift to streaming, Chief Executive Bob Iger said on Wednesday.

Iger said linear channels such as ABC still serve as an important marketing tool and reach older viewers who are not watching series such as "Abbott Elementary" on Disney's streaming platforms.

Still, the goal is to "reduce pretty dramatically our investment in content specifically aimed at those traditional networks," Iger said at the MoffettNathanson’s 2024 Media, Internet and Communications Conference in New York.

On Disney's theme parks business, Iger said he expected continued growth but perhaps not at the same rate as in recent years.

"We've had double-digit revenue growth in that business for quite some time, and that's extraordinary," he said. "But I think we're being realistic, too, in that delivering double-digit revenue growth ... well into the future is not necessarily that achievable."

Bob Iger

Last summer, Iger said he would take an "expansive" look at the entertainment giant's traditional TV assets, signaling the potential for strategic options that could include a sale.

Yahoo! Finance reports that ultimately did not come to fruition, with Iger saying Wednesday that the company determined in its analysis that linear "is not going to be a growth business but it could become an important component to our ability to engage with the consumer."

Iger said Dana Walden, who oversees Disney's television studios, and Jimmy Pitaro, who leads ESPN, have been tasked with reducing traditional network investments while also "seamlessly" managing the streaming businesses.

"You've got the same executives managing both, and their goal is to drive bottom-line growth," he said while speaking at a MoffettNathanson investor conference.

One example of this duality includes placing episodes of "Grey's Anatomy" and "Abbott Elementary," which air on ABC, onto the Hulu platform "pretty quickly" — or in some cases simultaneously.

The audiences, Iger said, are different, with ABC's being "older" than Hulu's. "We're basically aggregating greater audiences and we're amortizing costs," he added.

Although the executive said he still expects erosion when it comes to linear TV subscribers, the segment will "continue to drive profitability because we're managing our costs so effectively."