Streaming tears a billion hole
Walt Disney prescribed austerity measures
11/13/2022, 10:14 p.m
The Disney streaming division is booming, and the number of subscribers is increasing. But the costs are growing even faster. The entertainment group is now pulling the emergency brake and, among other things, is imposing an extensive hiring freeze.
According to media reports, the entertainment group Walt Disney is fighting rising costs with cuts and an extensive hiring freeze. CEO Bob Chapek sent a corresponding memo, several US business media reported. So there should only be new hires for very important posts. In addition, only absolutely necessary business trips should be undertaken.
The step comes a few days after the publication of the quarterly figures, which disappointed investors because of a high loss in the streaming division and led to a daily loss of the share of a good 13 percent. Disney stock has fallen 35 percent this year, faring lightly compared to its peers. Streaming competitors like Netflix, Warner Bros. Discovery, and Paramount Global have all fallen 45 percent or more this year.
Disney’s streaming division, while thriving on rising subscriptions to Disney+, Hulu, and ESPN+, made a quarterly loss of $1.5 billion due to high content costs and launches in new countries. Across the group, profits rose 1% year-on-year to $162 million. Things went particularly well in the amusement park division, which posted a new sales record of $7.42 billion.