It should come as no surprise that media companies, especially those with a movie and television component are suffering from consumer fatigue. Not only are re-jiggered and socially engineered projects failing, but the costs appear to be remaining steady.
As per published reports, the Walt Disney Company will undergo another round of restructuring that will lead to the layoffs of approximately 300 people, mostly with in the ABC television group. The target is said to be a reduction of 10% of the units operating costs for an estimated savings of approximately $300 million. On the horizon is a younger audience with no particular affinity for over-the-air broadcast television or cable news programs. With internet streaming, most users are becoming agnostic to the delivery medium and the immediacy of watching a program when it is broadcast. Even with a decrease in advertising revenue, many companies saw their bottom line protected by increased cable, satellite, and streaming programming fees.
For some companies, America’s divisive politics has produced audience increases, albeit among the older crowd. Some companies, like sport’s network ESPN, also owned by Disney, tried the politically correct route only to discover that sports fans did not like their sports delivered with a side of political correctness.
It is best to remember the old saying: talent may come and go, bottom-line production may come and go, but “suits” (executives) simply rotate through the system – grabbing everything they can while full well knowing that their longevity is linked to hit programs and the bottom line.
This is not the first batch of layoffs for Disney who laid off a number of people in their consumer products and interactive media units in 2016 and was widely excoriated for outsourcing some of its IT work to foreign workers – while demanding that existing employees train their replacements in order to obtain their severance package.
However, the greatest competition is not coming from the major companies, but user-created content. With the price of high-quality digital cameras, software-based editing suites, and green-screen technology, the barrier to content creating has fallen significantly and companies such as YouTube are allowing advanced amateurs to monetize their product. Without major fixed overhead and high-priced talent, many smaller content creators are more than willing to settle for less money and to own their branded niche of the market.
Disruption is coming. Are you going to be the one asking, Am I Next?