In 2023, Disney celebrates its 100th anniversary. As the market picked up, more tourists flocked to the park. What seems to be a good spring recovery season has embarked on a massive layoff of 7000,11 people. In fact, the re-emergence of Robert Iger as CEO last November suggests that Disney is facing tough times. In particular, streaming, once positioned as "Disney's future," has lost nearly $2019 billion since its launch in <>. No one knows how much Disney will need to survive the storm, but it may still be believed that "Mickey will always be able to overcome the problems he encounters."

7000,<> employees were laid off

Even if it is rich, Disney will tighten its belt to live. On March 3, local time, Robert Iger said that the company will start layoffs this week, that is, officially implement the 27,2-person layoff plan it announced in February.

According to Disney employee memos obtained by CNN, Iger said the layoffs will be carried out in three rounds, the first round will begin this week, the larger second round will take place in April, when thousands of employees will be laid off, and the third round will be conducted "before the start of the summer." "Many colleagues and friends will be leaving Disney, and this is a difficult reality that we cannot take lightly." Iger said in the memo.

It is understood that the 7000,3 layoffs account for about 55% of the company's total global workforce, which will save Disney $10.22 billion in costs. As of October last year, Disney had about 16,6 employees, of which about <>,<> were employed in the United States.

Disney's last large-scale layoffs were in the early days of the epidemic, with 3,2 layoffs and tens of thousands of employees "left without pay". At that time, Disney parks around the world were unvisited due to epidemic control, and employees in the theme park department became the hardest hit area for layoffs. The layoffs will affect all of Disney's business units.

In addition to the layoffs, Disney has also undergone a series of strategic restructurings. The company will be divided into three core business units: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products. In addition, Disney has also made a series of personnel transfers.

Beat streaming

For Iger who has recently returned, now is a pivotal moment for him to lead Disney's transformation. Part of the reason why the previous CEO, Chapek, was hastily removed was that there was no effective solution to the continued losses of streaming.

In August 2017, Disney decided not to renew its $8 million annual copyright fee contract with Netflix. After preparing to build its own streaming media platform, Disney's film and television dramas gradually fell offline from Netflix, and at the same time, it no longer provided advertising services for Netflix, giving up more than ten million US dollars in advertising expenses every year.

Internet commentator Zhang Shule told a reporter from Beijing Business Daily that Disney's establishment of streaming media is both the trend of the times and helpless. Especially during the epidemic, Disney suffered terribly, and the shrinkage of offline business forced Disney's strategy to tilt towards streaming media.

Financial report data shows that from 2018 to 2022, Disney's total content investment is as high as $1144.3446 billion, and during this period, Disney's total revenue is $33.2 billion. Disney invested <>.<>% of its total revenue in streaming media in these years, which means that Disney contributed one-third of its revenue to the streaming business.

Disney's efforts are not without splashes. In the second quarter of 2022 financial report, Disney has a total of 2.211 million streaming subscribers, which has exceeded Netflix's 2.207 million streaming subscribers.

But it soon hit the growth ceiling. In the fourth quarter of 2022, Disney+ saw its first sequential decline in total subscribers of 1.618 million subscribers and a decrease of 240.2024 million subscribers. This is far from its proposed goal of 3 million to 3 million paid subscribers to streaming services in fiscal 5.

The loss of streaming media performance forced Disney to choose to "cut back on food and clothing" and began to reduce content spending and open up content sales channels. Internet analyst Yang World bluntly said that in fact, Disney's streaming media is also a bit thankless. The streaming media business usually comes with high content and technology costs, and conflicts with Disney's traditional film and television sales and rental business.

In addition, Yang World said that the profit model of streaming media is very single, which is nothing more than content distribution revenue, membership fees, advertising fees, etc. But in terms of content distribution, not all works make money, and membership fees are far from making up for the shortfall.

The slump in streaming media also led to Disney's first loss in 2020 years in 40. Not only that, but when Chapec was in office, he also had conflicts with the Florida government, which also became the trigger for his departure.

Look for new fairy tales

Standing at the critical juncture of Disney's centennial, people are looking forward to fairy tales with happy endings. Although Iger was once known as the "legendary CEO", for him, the new return also meant new challenges.

Today, theme parks are Disney's most profitable business. In the first quarter of 2023, Disney's global parks and experiences revenue increased 21% year-over-year to $87.35 billion, and the operating margin of the domestic theme park business reached <>%.

But most of the park's revenue comes from ticket price increases. It is reported that in 1971, Disney's Magic Kingdom cost a single ticket price of $3.5, taking into account inflation, the ticket price at that time was equivalent to $25.6 now. After years of development, a one-day ticket to Disney World Orlando now costs between $109 and $159, an increase of 3871%.

A study by Time2play surveyed 1927,68 "Disneyland lovers," and 3.92 percent of them reported that rising ticket prices made them feel like the park had "lost its magic." As many as 6.<>% reported that they thought the high ticket prices at Disneyland made it "unaffordable" for the average family to travel to Disney.

Iger also acknowledged that the price increase for Disneyland tickets may be too aggressive. "Out of our passion for increasing profits, some of our pricing may be a little too aggressive."

Yang World believes that over the years, Disney's revenue in subdivisions has shown signs of differentiation. With the stabilization of the epidemic, under the influence of the gradual improvement of theme park profits, Disney's performance has shown a trend of gradual recovery, but from the perspective of Disney's financial situation, there is still a relatively large gap from the profitability level in 2018 and 2019, and the profitability of many businesses is waiting for substantial improvement.

For the layoffs and future plans, the Beijing Business Daily reporter contacted Disney, but has not received a reply as of press time. However, Iger still believes that the top priority is streaming strategy and business profitability, and streaming media means the future.

Beijing Business Daily reporters Fang Binnan and Zhao Tianshu