Walt Disney Co. is in play. (I remember getting one of these sent to me after the Disney Channel's launch in 1980.)
CEO Bob Iger fired his replacement and can’t find another one. The company is killing its streaming service by reducing content and raising prices. Its deal with Penn Entertainment, directly running a sportsbook, means ESPN is now incompatible with the main company’s business model. The resorts business is tanking, thanks mainly to climate change.
My guess is that the entertainment company will be sold to Apple, probably within a year. ESPN, ABC, and the parks will be spun out as separately traded companies. It might happen all at once.
The only reason to keep the whole thing together was “synergy.” A bad year for one division might be offset by a good year in another. The combination would then be a better investment than the parts.
But that’s not working. The movie business is dying. Disney is doing all it can to hasten that by refusing to bargain with its unions. If management and labor aren’t partners, you can’t do business.
The TV business was dead years ago. This includes cable.
The resorts business is increasingly divorced from the rest of the company.
The Internet is doing to the streaming business what it did to print. Paywalls take away 90% of your audience. Advertising rates keep declining because there’s too much free content. Live sports are viable but the billionaires who control teams and leagues keep pricing fans out of the market. If it’s all just about money, the players will gravitate to whoever offers more of it.
All this is Moore’s Law in action. Lower chip costs, and higher capacities, explode outward into every part of the economy. New business models are called for, as is a new humility toward consumers. It’s the customer who decides what goes, not the entertainers, and not the studios. We vote with our wallets, and we run the show.
Movie producers are crying the way newspaper publishers did a generation ago. It does no good to claim life is unfair. You find another way, you evolve, or you die. Newspapers chose to die. Will video?
