Following an unceremonious purge of Disney content on Hulu and Disney+ last month, House of Mouse officially confirmed in an SEC filing that it is taking a $1.5 billion depreciation fee that it can use as a tax write-off. As the company continues to look to refine its streaming strategy going forward, it hopes to lock in these expenses in the third quarter “to adjust the book value of these content assets to fair value.” For those still left with a sour taste in their mouths after the first round of cuts, things are only expected to get worse as the company is still revisiting its catalog in an attempt to move on to a CEO. Bob Igerideal path to profitability.
In total, more than 50 TV shows and movies have been removed from Disney+ and Hulu, including some of the most popular titles. Willow, The Secret Society of Benedict, doll face, big shotsAnd The one and only Ivan. Worse, since many of these titles were closely associated with the company and their intellectual property, it is unlikely that some of them will be sold to other platforms, and there will be no way to watch them outside of physical releases, if they have them. CFO Christine McCarthy and Iger cabled the move in Disney’s latest earnings report, revealing that the company plans to write down between $1.5 billion and $1.8 billion in cutbacks, even if it means losing so many artists’ ideas in the process.
However, with the filing with the SEC, it appears that House of Mouse is aiming for the higher end of this range. Disney is expecting another $400 million impairment charge as the company “currently expects additional produced content to be removed from its DTC and other platforms primarily during the remainder of the third fiscal quarter.” This means that more fan-favorite shows are likely to end up locked in the Disney vault, such as The world through the eyes of Jeff Goldblum And Rosalyn. Most of the new cuts are expected to take place sometime in the third fiscal quarter.
Disney’s previous content purge was not well received
Disney barely fawned in the first major round of cuts. While the ship needed a course correction as the company was losing money on overpriced shows and Disney+ was devastating subscribers, the way it happened mimicked the coldness of Warner Bros. cuts. Discovery in 2022. It was the exact cleanup practice to save on leftovers and cash in on tax write-offs that so outraged Willow writer John Bickerstaff who called the company’s actions “absolutely brutal”. Iger, however, is playing into the hands of the business, with business dictating that Disney’s losses will widen again this quarter after initially shrinking to $659 million in the second fiscal quarter, meaning action is still needed.
This isn’t the only move they’re taking to fix the financial slump, as Iger is also looking forward to another boost to the ad-free Disney+ subscription plan as they continue to aim for profitability. All of this also comes in the context of Disney announcing a combined app for Hulu and Disney+, which is expected to launch in the US later this year. While not a full blown merger of Warner Bros.’s Max service. Discovery, it further consolidates the Disney stake, especially since Comcast may be trying to sell its Hulu shares.
Stay tuned to Collider to learn more about Disney as they continue to change their streaming strategy.
Source: Collider
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