Disney gains $11 billion in market value after the entertainment titan refocuses on streaming
- Disney stock rose as much as 4.7% on Tuesday, adding about $11 billion in market capitalization, after the media giant signaled a greater focus on streaming.
- The company’s creative teams will produce more content for Disney+ and its other video-streaming services, while its distribution and commercialization teams will be combined into a single, global organization.
- Disney+ passed 60.5 million subscribers in early August, less than nine months after its US launch.
- Billionaire investor Dan Loeb wrote to Disney CEO Bob Chapek last week to suggest he pour more resources into streaming.
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Disney stock jumped as much as 4.7% on Tuesday after the entertainment giant said it would reorganize its media and entertainment businesses to build on the success of its Disney+ streaming service.
The share-price increase added about $11 billion to Disney’s market capitalization, lifting it to $237 billion.
Disney’s creative teams will focus on producing content for its streaming services as well as legacy platforms such as cinemas and television networks, it said in a press release on Monday.
The company will also centralize its distribution and commercialization teams into one organization, which will oversee its streaming services and handle both distribution and advertising sales.
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“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,” Disney CEO Bob Chapek said in the press release.
Disney+, which only launched in the US last year, boasted 60.5 million subscribers as of August 3. Netflix, the market leader, reported 193 million subscribers at the end of June.
Disney’s reorganization follows activist investor Dan Loeb’s letter to Chapek last week. The Third Point chief called for the company to halt dividends and plow the $3 billion in annual savings into its streaming service.
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