Big changes are taking place at Walt Disney Co. (NYSE:DIS)
The Mouse House has announced that it is closing 20 foreign TV channels as Chief Executive Officer Bob Chapek looks to restructure the company in the wake of the COVID-19 pandemic and make it an online juggernaut that reaches more people worldwide.
Besides scrapping the foreign TV networks, Chapek is shutting down a musical version of the animated film “Frozen” that opened on Broadway two years ago, closing a chain of English-language schools in China, and scaling back a $1 billion U.S. resort-technology project that has largely been replaced by a simple mobile-phone app.
To cope with the pandemic, Disney shuttered its theme parks in March, anchored its cruise ships and furloughed some 100,000 workers. Revenue fell 42% last quarter, hurt by the closed businesses and loss of advertising sales at TV networks such as ESPN and ABC.
But the biggest strategic shift is unquestionably Disney’s push into online video. The company has said it is removing the Disney Channel TV networks from pay TV systems operated by Virgin Media and Sky in the U.K. and putting the programming on the new Disney+ streaming service.
In all, the company shut down more than 20 international channels, taking a $4.9 billion U.S. charge against earnings and will instead expand its worldwide streaming operation. Chapek introduced a new online service using the Star brand internationally that will feature content from Disney networks like ABC and FX.
He also said he’d make “Mulan,” the live-action remake of the 1998 animated hit, available to purchase for $30 U.S. on the Disney+ streaming service at the same time it’s released in theaters.
Disney shares cratered in March as the pandemic hit businesses, but they’ve staged a comeback. After hitting a low on March 23, the stock is up more than 50%.