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Disney removes dozens of series from Disney+ and Hulu, including ‘Big Shot’, ‘Willow’, ‘Y’ and ‘Dollface’
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- Authors
- Nellie Andreeva
- Published
- May 18 2023
- Word count
- 214 words
I really don't understand the logic behind killing recent exclusive content like this. A rich back catalog is much of the value of a streaming service. From a storage/bandwidth standpoint I'm sure the costs of keeping these shows around is negligible, so the savings must be related to royalties or licensing fees? Seems like self-sabotage to me.
Between this, and the news that Disney is shutting down the Galactic Starcruiser hotel after little more than a year of operation, and the cancellation of the $1b Lake Nona campus, I'm left with serious questions about the financial health of the company. Previously I was under the impression they were sitting on top of the world, but now I'm not so sure. This looks like panic.
So they’re taking a significant loss on this. One possibility is accounting shenanigans.
This likely works like depreciation. When a company builds a building, most of the expense is up front, and depreciation is about scheduling the accounting expense to happen regularly over the expected lifetime of the building. The accounting is supposed to reflect the reality that big expenses make financial sense when you get a durable asset that will be used for years. You don’t want an expense like that to look like a big one-time loss, and you don’t want to pretend that you got the building for free in future years, because it will make profits look too good, and the building will eventually need to be replaced.
Similarly for making a TV show. The money gets spent right away, but then it’s on streaming a long time, so they can push the expense into the future when people will (presumably) watch the show. This lets streaming companies spend a lot of money on content under the assumption that it will pay off over time.
But, after the money has been spent, sometimes companies don’t want to have a bunch of smaller expenses scheduled for many future quarters. They try to get all their losses done in one quarter so they can have a bad quarter and after that their profits look better. The stock market is future-oriented and forgets about previous bad quarters fairly quickly, particularly if you have a one-time event to blame it on.
Disney got a new CEO recently. I’m guessing he’s trying to put some of the previous CEO’s expensive boondoggles behind him, and he has “financial uncertainty” to blame it on.
So, in addition to cutting some real expenses (like shows that won’t be made), they can change the schedule of some accounting expenses by pulling some content. If they say the content isn’t going to be used in the future, they can take all the expense associated with it now. (And maybe other cancelled plans work that way too?)
Later, I suppose they could bring it back again. But it needs to be pulled long enough that the accountants will let them write it off. They need to pretend they’re not going to make any more money from this content for a while, and then they can go back to making money from it. (If it’s evergreen content, there are always more kids they can get to watch it.)
Disney has a history of doing re-releases of classic movies after they’ve been unavailable for a while, so this is likely an old game for them. Re-releases are lucrative because the content has already been paid for.
Financial math is largely built on what people expect the future will bring. Change those expectations and you change the numbers. We expect the stock market to go up and down based on what investors predict, but accounting is sometimes future-oriented too, because it’s based on the plans people make. Plans can change.
Wow, thanks! That's the first possible explanation for this decision that actually makes total sense! It's stupid that they're allowed to play games with their expenses like that, but I get why they would do so when allowed to.
p.s. I would exemplary you, but I already used mine a few minutes ago. Will apply it later when it comes back. :)
You’re welcome!
To go on a bit, because I’m too interested in financial stuff:
It’s not a total free-for-all because the money was spent and they do need to take the expense sometime, and the accountants do need to see that their plans really did get changed. I guess if they were allowed to just take the expense whenever they wanted, the previous episodes wouldn’t need to be pulled? But, they can’t do that because there are rules.
One weird bit is, even if they took out a real loan to make the show and started to pay it each month and then paid it off early, I don’t think it would make a difference for the accounting? It’s like it’s easier to change how expenses get paid in reality than in theory.
The effect on some kids who can’t watch a show is weird side effect of the rules and the gaming of the rules and streaming subscriptions. Before, parents would buy stuff on video cassette or DVD and kids could watch the show until the physical media wears out.
Also, you can still “buy” a show and keep watching it as long as you want. (That is, until the technology changes or something - I’m not sure such indefinite deals can be trusted?) Technically it’s the same but financially it’s different, and getting cut off is a consequence of the finances.
I guess people can pay up front for things, and companies can pay up front for things, but companies need to pretend that they don’t, for the big expenses anyway. But sometimes they want to stop pretending that they didn’t already pay for it.
From my time working at Disneyland, they tried to bill Disney Theme Parks as a premium brand. I feel like the Parks and Resorts division they may finally be realizing there's a limit to this, but it may also be panic. I quit during the pandemic, so I also don't know what's going on internally at all.
They grew rapidly betting on Marvel and Star Wars, but they're also burning interest in those franchises up, which is definitely going to cause them some issues.
Yeah, I really don't understand this either. Netflix removing underperforming content they didn't produce, and so have to pay ongoing license fees for, makes sense. But Disney removing content from their catalogue, when they actually did produce it and/or own it, so don't have to pay any license fee, makes absolutely no sense to me. Can someone shed some light on why they would do this? Because it surely can't be about saving money.
And I unfortunately know at least one person that is going to be very very disappointed with this move. My nephew watches The Mighty Ducks: Game Changers religiously. :( And he's the sole reason I keep paying for Disney+ so this is a pretty stupid move if their goal is to hold on to subscribers.
As the article mentions, HBO did the same.
I guess it's possible they're doing it because they are under the mistaken impression that if they remove this stuff fans will magically be instead interested in more mainstream offerings, allowing them to focus on those and increase profitability.
Or maybe there's something to the comments in the article saying they're doing it so they don't have to keep paying residuals to their actors and writers... I mean Disney does have a history of not wanting to pay their writers at all.
Their recent string of movie disappointments is also not helping. A lot of the Disney+ shows that they had, and I’m talking about IP shows from Marvel and Star Wars, have also been getting low viewership. So I imagine the shows without those brands are doing even worse.
Variety: Disney to Take $1.5 Billion Content Write-Off Charge in June Quarter After Pulling Dozens of Titles From Streaming Services (June 2)
I'd imagine that they're embarrassed of Willow, so no surprise there. Channel AARRR for any other shows people want.
My fiancée really enjoyed Willow as she enjoys cheesiness (Street Fighter is one of her favorite films) so she was sad to see the series discontinued. Although we watch the series through alternative means to Disney+, it's still a dick move to just remove it.