Disney+ has overperformed since launching, while other parts of its business remain battered by the pandemic
Disney investor Dan Loeb is pleading with the company to go all-in on streaming, arguing the company should “permanently suspend” its $3 billion annual dividend and redirect that money towards Disney+’s original content budget.
“By reallocating a dividend of a few dollars per share, Disney could more than double its Disney+ original content budget,” said Loeb, the founder of hedge fund Third Point, which owns around 5.5 million shares of the company as of June 30, in a letter to Disney CEO Bob Chapek.
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Click Here Already a subscriber? LoginDisney+ has got off to a better than expected start, surpassing 60 million subscribers globally within its first 9 months, reaching the low-end of its 2024 subscriber goals four years ahead of schedule. But that has come while the coronavirus pandemic has obliterated the company’s theme parks and movie businesses.
Also Read: 'High School Musical: The Musical: The Series' Sets Holiday Special at Disney+
The parks division lost out on $3.5 billion in operating income for its fiscal third quarter, which ended June 27. Overall, Disney’s parks business pulled in just $983 million during the quarter, which was an 85% slide compared with the $6.6 billion in revenue the parks earned during the same period last year. That’s coming off a second quarter in which the company took a $1 billion hit earlier this year. The company announced last week it would be cutting around 28,000 jobs.
The pandemic has supercharged the shift towards streaming, which now boasts around seven top-tier streaming services, with ViacomCBS’ upcoming rebrand of CBS All Access into Paramount+ set for early next year. Loeb argues that Disney’s direct-to-consumer unit that also includes Hulu and ESPN+ can collectively challenge Netflix.
“With Disney’s superior tentpole franchises and production capabilities, we believe that the company can exceed the subscriber base of the industry leader, Netflix, in just a few years,” Loeb continues. “But time is of the essence and the company should consider significant additional investments in content both through production and acquisitions here and abroad.”
Also Read: 'Mulan' Was Viewed for 525 Million Minutes Over First 3 Days - Here's What Disney+ Might Have Made
Because of the pandemic, the only film Disney has put in theaters since March (Pixar’s “Onward”) has been “New Mutants,” one of the films it acquired in its Fox deal. With the theatrical business still reeling, Loeb argues that rather than wait for theaters to become safe again, Disney should push more of its films towards streaming. Just about every major release has been pushed out of 2020.
Though not the way they did with “Mulan,” where subscribers could pay an extra $29.99 for three months of exclusive access. Loeb described the experiement as a valuable learnings experience (TheWrap estimated that “Mulan” could have done quite well for Disney, but it’s an imperfect guess).
“While some pundits have described the Mulan release as a ‘debacle’ due to the $29.99 cost for a VOD download, we see this as a valuable learning experience, expect stumbles on the way to greatness, and believe this will drive a faster decision to make all content available to subscribers for a simple subscription fee,” Loeb writes.
16 Disney Live-Action Remakes of Animated Hits in the Works (Photos)
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Disney will be pumping out live-action versions of their animated classics for a long time time to come. Here's a list of titles in the works, including the release date of the original.
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Disney"Jungle Cruise"
Okay, okay, "Jungle Cruise" might not count as live-action film based on a previously animated classic, but it is based on a ride at Disneyland, so we're going to include it. Plus, we'll take any chance to talk about Dwayne Johnson and Emily Blunt in the same sentence. It will hit theaters July 24, 2020.
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Disney
"The Little Mermaid"
So now we're getting into films that are in some stage of development but haven't necessarily been slated for release. After all, Disney has so many untitled films slated, it's hard to count. But a live-action version of "The Little Mermaid" has been long discussed, as it is arguably one of the most popular and profitable movies in Disney's vault. Rob Marshall is on board direct, with Halle Bailey set to star as Ariel and Melissa McCarthy as Ursula. -
Getty Images/Disney
"Pinocchio"
"Pinocchio" is also in the works, with Tom Hanks playing Geppetto.
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"Snow White"
Forget her sister -- the original baddest chick in the Disney animated kingdom is coming back for her own standalone film. It was announced at the end of October 2016. -
Disney
"The Jungle Book 2"
This is a no-brainer follow-up to Favreau's hit from spring 2016, based on the animated classic released in 1967. -
Disney
"Snow White"
Forget her sister -- the original baddest chick in the Disney animated kingdom is coming back for her own standalone film. It was announced at the end of October 2016. -
"Aladdin"
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Disney
"Hercules"
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"Peter Pan"
Neverland will get a practical set if Disney has its way updating the 1953 animated film. -
YouTube
"James and the Giant Peach"
In one of the more interesting adaptations, this beloved Roald Dahl book became a quirky claymation hit for Disney in 1996 with director Henry Selick. Heavy dramatist director Sam Mendes was attached to take a stab at it, but he has since dropped out. -
Disney
"Hunchback"
In early 2019, a live-action film based on 1996's "The Hunchback of Notre Dame" was announced. Tony-winning playwright David Henry Hwang was tapped to pen the script, with Alan Menken and Stephen Schwartz handling the music.
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Disney
"Tinker Bell"
This movie has also been in the works for quite some time, with Reese Witherspoon attached as the cute little fairy from "Peter Pan."
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"Bambi"
In January 2020, Disney hired Geneva Robertson-Dworet (“Captain Marvel") and Lindsey Beer (“Sierra Burgess Is a Loser”) to write the script for the live-action remake of the 1942 animated classic.
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"Oliver Twist"
While Disney never formally made a direct animated take on Charles Dickens' beloved orphan, the studio did release the adorable 1988 "Oliver and Company," inspired by Dickens' tale but told with animals. The studio also made a small-screen live-action version in 1997 with Richard Dreyfuss. -
Disney
"Lilo & Stitch"
This project was announced in October 2018 with Mike Van Waes attached to pen the script. Dan Lin and Jonathan Eirich of Rideback are producing. In November of last year, it was announced that Jon M. Chu was in early talks to direct.
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"The Lion King" Sequel
In September, it was announced that Barry Jenkins would direct the follow-up to Jon Favreau's 2019 hit. The logline is being kept under wraps, but Deadline reported that the film will explore the mythology of the other characters in Pride Rock, including Mufasa’s origin story.
No release date for the next film has been set, and it’s unclear when production would begin. No cast has been set either.
The studio is raiding its vault to remake classics including ”The Little Mermaid“
Disney will be pumping out live-action versions of their animated classics for a long time time to come. Here's a list of titles in the works, including the release date of the original.
Tim Baysinger
TV reporter • tim.baysinger@thewrap.com • Twitter: @tim_bays