Time to Grow Up, Disney+ and Hulu: Content Cuts Coming as Part of Streaming’s ‘Maturation Process’

Cynthia Littleton Business Editor National Amusements, the parent company of Paramount Global, has received a $125 million investment from BDT Capital Partners, an investment firm that specializes in supporting family-controlled businesses and estates. The influx of cash is designed to take pressure off of Paramount Global stock price, which has been under water in recent months in part because of concern about National Amusements’ financial health. The deal will allow National Amusements to pay off some existing loans that have been secured by the company’s Paramount Global shares. “Our expanded partnership with BDT & MSD reflects our strong belief in Paramount’s ability to deliver value to all shareholders. Paramount has the best assets in the media industry, with an incredible content library and IP spanning all genres and demographics, as well as the No. 1 broadcast network, the leading free ad-supported streaming television service and the fastest-growing pay streaming platform in the U.S.,” said Shari Redstone, Chair, CEO and President of NAI. “NAI has conviction in Paramount’s strategy and execution, and we remain committed to supporting Paramount as it takes the necessary steps to build on its success and capitalize on the strategic opportunities in our industry.”

The Wall Street Journal reported that the two media and entertainment giants want to reach a deal to resolve the ownership of Hulu, but the disagreement over how much the nation’s fifth-largest streaming service is worth is stalling progress. Neither Disney nor Comcast responded to requests for comment.Disney owns two-thirds of Hulu, while Comcast owns one-third, acquired when it took control of one of the streamer’s founding backers, NBCUniversal, in 2011.

EXCLUSIVE: The layoffs impacting thousands of Disney staff in the U.S. have spread to Europe, the Middle East, and Africa.

Cannes took audiences back to their childhoods with the first screening of “Indiana Jones and the Dial of Destiny.” The film’s splashy premiere saw stars Harrison Ford, Phoebe Waller-Bridge and Mads Mikkelsen walk the red carpet, alongside Walt Disney CEO Bob Iger and director James Mangold. The first reactions were slow to drop but were filled with enthusiasm.

first reported, comes just a week after the entertainment giant announced during its quarterly earnings call its plans to remove “certain content” from its streaming platforms in a cost-cutting move.“We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation,” Disney Chief Financial Officer Christine McCarthy said during the call.McCarthy also unveiled Disney’s plans to “produce lower volumes of content,” marking a strategic shift from the company’s original goal to flood “the so-called digital shelves” when Disney+ launched three and a half years ago. While Bob Iger explained this plan’s intent to push along subscriber growth, the Disney boss noted during the earnings call that the company “realized that we made a lot of content that is not necessarily driving sub growth.”The former strategic plan also left marketing spending to be “spread so thin,” according to the Disney head, who noted that the company would be more “surgical” in content decisions rather than “spending a lot of money marketing things that are not going to have an impact on the bottom line.” Instead, Iger noted that freeing up these budgetary constraints would enable Disney to focus on tentpole projects that are “great” subscription drivers, including “Avatar,” “The Little Mermaid,” “Guardians of the Galaxy Vol.

It was a great night for Disney as Indiana Jones And The Dial Of Destiny had a smash debut in its World Premiere Thursday evening at the Cannes Film Festival where the June 30th release received a warm 5 minute standing ovation, especially for Harrison Ford in his swan song in the title role he started playing 40 + years ago. There noticeably to witness the French love and affection was none other than Disney boss Bob Iger attending his first-ever Cannes Festival (believe it or not) and even taking his own photos during the ovation for the movie. At the Carlton Beach after party I told him Deadline had just been the first to post its review, a rave (from our colleague Stephanie Bunbury) and you could see the absolute relief on his face. “You have made me very happy to hear that, ” he told me, and he meant it. All this came on the same day Disney took another shot at Florida Governor Ron DeSantis by announcing the cancellation of a plan to move several thousand California employees to Florida. The Cannes respite must have been nice.

Todd Spangler NY Digital Editor Disney’s culling its content on Disney+ and Hulu is coming as early as next week — with the media company pulling off more than two dozen titles, including series “Willow,” “The Mysterious Benedict Society” and “Dollface,” and movies such as “The One and Only Ivan.” A Disney rep confirmed that 27 titles will be pulled off Disney+ and Hulu. On the company’s earnings call last week, CFO Christine McCarthy said Disney expects to take a write-down in the June quarter of $1.5 billion-$1.8 billion from removing content from its streaming platforms. “We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation,” McCarthy told investors. “As a result, we will be removing certain content from our streaming platforms.”

Following its out-of-competition world premiere this evening at the Cannes Film Festival, Indiana Jones and the Dial of Destiny was treated to a five-minute standing ovation as the audience inside the festival’s Grand Théâtre Lumière.

Harrison Ford returned to the Cannes Film Festival on Thursday, picking up an honorary Palme d’Or before the world-premiere screening of Disney/Lucasfilm’s Indiana Jones and the Dial of Destiny.

Walt Disney CFO Christine McCarthy nudged investors to discard a few narratives that emerged from the latest earnings: that Disney parks growth may be unsustainable and that the company is shedding subscribers and slashing streaming content.

Bob Chapek, Former CEO 2022 Chapek compensation: $24.2M/ -25.5% Bob Iger, CEO 2022Iger compensation: $15M/ -67.3% Median employee compensation: $54,256 Chapek pay ratio to median employee: 446 So long, Mr. Chapek! It was a rocky time atop the Magic Kingdom for the Disney chief, who was booted from his post in November just months after the company’s board renewed his contract. During Chapek’s tenure Wall Street soured on Disney’s spending on its streaming service, to say nothing of a near employee revolt over his stumbling response to Florida’s “Don’t Say Gay” law.

Todd Spangler NY Digital Editor Disney has pegged total cash content spending at around $30 billion for this year — but the ongoing Writers Guild of America strike may drive that down, CFO Christine McCarthy said. “If you haven’t noticed we’re in the middle of a writers strike,” McCarthy said, speaking Wednesday at MoffettNathanson’s Technology, Media and Telecom Conference in New York. The WGA walkout may reduce Disney’s cash spending on content for the balance of the year, she said. At the MoffettNathanson conference, MCarthy appeared alongside Disney president of ad sales Rita Ferro. The two Disney execs spoke a day after the media conglom’s upfront presentation in the Big Apple to ad buyers and brands — which was noticeably light on scripted fare, given the writers strike. Marvel’s Kevin Feige previewed upcoming Disney+ series “Secret Invasion,” featuring Samuel L. Jackson and Don Cheadle, and announced premiere dates for “Loki” Season 2 and “Hawkeye” spinoff “Echo.”

J. Kim Murphy Bob Chapek, the former Disney CEO who was abruptly ousted from the company last November, is among a group of executives facing a lawsuit claiming violations of securities law for allegedly providing misleading statements and omissions about Disney+ and its subscriber growth. The case, filed by Local 272 Labor Management Pension Fund on May 12 in the U.S. District Court for the Central District of California, also names former Disney executive Kareem Daniel and current CFO Christine McCarthy, as well as the Walt Disney Co. itself, as defendants. The document states that the case seeks a lead plaintiff and judicial determination for a class action suit representing Disney shareholders from Dec. 10, 2020 to Nov. 8, 2022.

Cynthia Littleton Business Editor On May 12, Variety partnered with Reddit’s Television subreddit to host an Ask Me Anything discussion about the ongoing writers strike. Variety co-editor-in-chief Cynthia Littleton — who has covered the television industry for 25 years and wrote the book “TV on Strike: Why Hollywood Went to War Over the Internet” about the 2007 strike — fielded many smart questions from Redditors, touching on topics like AI, who gets paid during the strike, and how long it could last. Below are key selections from the discussion, lightly-edited for clarity.

Cynthia Littleton Business Editor Telemundo will add two starry telenovelas, “El Conde: Amor y Honor” and “Vuelve a Mi,” and a ninth season of its hit drama series “El Señor de los Cielos” to its 2023-24 primetime slate. Telemundo is bringing star Fernando Colunga back to the screen after a multi-year break from novelas for “El Conde,” an established novela format. Telemundo’s spin is a period drama set in the 1930s and ’50s, revolving around a man who is thought to have died in jail but turns up 17 years later to the surprise of his family and associates. Other cast members include Ana Brenda Contreras, Marjorie de Sousa, Chantal Andere and Sergio Sendel. It was shot stages and on location

second fiscal quarter of 2023, CEO Bob Iger addressed the artificial intelligence elephant in the room, making it clear that Disney isn’t shying away from the technological frontier — quite the opposite, in fact.“AI developments represent some pretty interesting opportunities for us,” Iger said. “In fact, we’re already starting to use AI to create some efficiencies and ultimately to better serve consumers.”Beyond confirming that AI has already found a home within the house of the mouse, Iger addressed the natural challenges that come with any new, disruptive technology, including the managerial complexities.“It could be extremely difficult to manage, particularly from an IT management perspective,” Iger said, referring to the tech’s advanced nature.

Todd Spangler NY Digital Editor Disney is pulling Hulu tighter into the Mouse House. On Disney’s earnings call Wednesday, CEO Bob Iger said the company will soon launch a “one-app experience” in the U.S. that incorporates Hulu content into Disney+. The new combined offering will launch by the end of 2023, he said. “While we will continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our [direct-to-consumer] offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said.

Disney will roll out a single streaming app with programming from ESPN+, Hulu and Disney+ by the end of this year.

Disney will be yanking some content from streaming as it rethinks its costs and strategy, and is looking at a content impairment charge of $1.5 billion to $1.8 billion as it does.

Cynthia Littleton Business Editor Endeavor has big financial plans for the rest of the year as the company announced Tuesday it will declare its first dividend and begin its first stock buyback program as it awaits its acquisition of WWE and sale of IMG Academy. Endeavor delivered solid first quarter results on Tuesday, powered by growth in its owned sports properties unit which is about to grow substantially as Endeavor closes its $21 billion takeover of WWE later this year. Endeavor’s events and experiences unit also was in positive territory for the quarter. But the hangover of the January 2022 sale of the Endeavor Content production unit put a dent in the representation unit’s quarterly numbers.