Disney to Remove Underperforming Shows, Movies from Disney+, Hulu; How Deep will Cuts be?

As 2022 rolled along, there was increasing angst from both media members and content creators regarding the tactics that Warner Bros. Discovery used to cut costs, especially in its streaming segment. One of the most controversial moves came when WBD canceled a nearly-complete “Batgirl” film, preferring a $90 million tax write-down to releasing the movie direct to streaming, as had been intended.

The cuts didn’t stop there, however. WBD canceled several still-filming series, and licensed the rights to some of those shows to other streamers. The company’s tactics rankled creatives and producers who worked with WBD, but from a financial standpoint, it has been a successful strategy. WBD pulled out of its financial nosedive and actually saw its streaming segment post a modest profit of $50 million last quarter.

That’s likely a big reason that Disney seems to be following the WBD playbook to the letter, nowadays. During its conference call on Wednesday to discuss its most recent quarterly earnings report, Disney executives outlined more big changes coming for its entertainment streamers Disney+ and Hulu. Among those changes will be content cuts, similar to what users saw at HBO Max last year.

“We are in the process of reviewing the content on our [streaming] services to align with the strategic changes in our approach to content curation that you’ve heard Bob discuss,” said Disney’s CFO Christine McCarthy. “As a result, we will be removing certain content from our streaming platforms.”

The content cuts at Disney may start happening in short order. McCarthy circled the company’s fiscal third quarter as when it expected to start removing underperforming titles from Hulu and Disney+. Disney uses a different corporate calendar than many other companies, so its third quarter is the three-month period from April to June, which means titles could start disappearing from its streamers any day.

It was unclear how much content will be removed from Disney’s platforms, but there’s a possibility that Hulu bears the brunt of cuts. Disney CEO Bob Iger hinted at that possibility during the company’s last quarterly earnings call, when he said that general entertainment — which is Hulu’s main programming genre — was a segment of the company that could see deep cuts.

“General entertainment is generally undifferentiated as opposed to our core franchises and our brands which because of their differentiation and their quality have delivered higher returns for us over the years,” he said. “So we think we have an opportunity to, through more aggressive curation, to reduce some of our costs in the general entertainment side and in general, in volume.”

Many interpreted those comments as a possible intention to sell Hulu altogether, which Iger later confirmed as a possibility. But recent moves, such as the announcement that Disney was combining Disney+ and Hulu onto one app (though keeping the two services separate, for now), and the news that it was raising prices on the ad-free tier of Disney+, seem to indicate that the company will try to align its finances in a way that allows it buy the outstanding 33% of the streamer from Comcast.

Iger also reversed course a bit this week on his general entertainment comments, admitting that he might have been a bit over his skis in that regard.

“We’re bullish about an app that goes well beyond the Disney+-branded content and includes general entertainment, which, maybe at one point, I called undifferentiated,” he said. “That was a little harsh.”

There is a strong possibility that whatever content is removed from Disney’s streamers, it will be licensed to another streaming platform. Iger has said that Disney will consider licensing titles that don’t belong to its core franchises, and if they are to be removed from Disney streamers anyway, it would make little sense for the company not to at least shop them around to gauge their value to other companies.

WBD did the same with allowing certain canceled series to be optioned to ad-supported streaming services. Shows like “Westworld,” “Legendary,” “FBoy Island,” “The Nevers,” “Finding Magic Mike,” and many more are now available on both Tubi and the Roku Channel.

Disney executives likely won’t take the brash, defiant tone that WBD CEO David Zaslav did while executing his cost-cutting measures. The company values its reputation and its working relationships with content creators far too much for that — especially since Iger recently restored control of many Disney divisions to creative executives, rather than the business execs that his successor/predecessor Bob Chapek had installed. But, that won’t stop the company from doing what it has to do in order to reverse its big streaming losses, including making cuts to shows and movies on its streaming platforms.