Disney cuts traditional TV investment to focus on streaming profitability

Walt Disney has significantly reduced its investment in programming for traditional television networks to focus on maximizing audiences and profit in the streaming era, according to CEO Bob Iger. Returning as CEO in November 2022, Iger reassessed traditional media and recognized that channels like ABC still play a crucial role in marketing and reaching older viewers not engaged with Disney’s streaming content, such as “Abbott Elementary.”

Despite their continued importance, Disney has dramatically cut content investment for these traditional networks. At the MoffettNathanson’s 2024 Media, Internet, and Communications Conference, Iger stated, “We feel comfortable with our hand right now because we’re using those networks efficiently and effectively.”

Shows like “Abbott Elementary” and “Grey’s Anatomy” transition swiftly to Disney’s Hulu, drawing younger audiences. This strategy helps Disney amortize costs across platforms. Dana Walden, overseeing both traditional networks and streaming, plays a key role in this integrated approach. “We’re basically aggregating a greater audience, amortizing costs, and using the marketing of the traditional network to help in some cases,” Iger said. This approach is applied to Disney Channel, ABC, and National Geographic.

Iger also noted that while Disney’s theme parks have experienced double-digit revenue growth recently, sustaining such growth rates long-term may not be realistic. “We’ve had extraordinary growth, but delivering double-digit revenue growth well into the future is not necessarily achievable,” he commented.