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Photo: Disney

Disney shares were up nearly 5% in after-hours trading Monday after the entertainment giant announced it would be shifting its entertainment strategy to have streaming be its "primary focus."

Why it matters: The company is facing investor pressure to invest more in streaming, its strongest-performing sector. Its other business lines, like movies, parks and cable, are being heavily impacted by the pandemic.

Details: The company will rearrange its structure to focus on developing and producing original content for its streaming services (Disney+, Hulu and ESPN+), as well as for its legacy TV networks.

  • The new Media and Entertainment Distribution group will be headed by Kareem Daniel, formerly president of Disney's Consumer Products, Games and Publishing division.
  • The three groups that will produce content for linear, TV and film will be Studios, General Entertainment and Sports. Leaders of those groups, as well as Daniel, will report directly to Bob Chapek, CEO of Disney.
  • Studios will be led by Alan F. Horn and Alan Bergman, co-chairmen of Walt Disney Studios. Their new titles will be chairmen, Studios Content.
  • General Entertainment will be led by Peter Rice, who came to Disney through its acquisition of most of 21st Century Fox in 2019. His new title will be chairman, General Entertainment Content
  • Sports will be led by ESPN president Jimmy Pitaro. His new title will be chairman, ESPN and Sports Content.

Between the lines: With the announcement, Disney says that the company's parks and resorts division will remain the same and that its streaming and international division will be led by Rebecca Campbell, who will serve as chairman.

The big picture: Prior to the pandemic, Disney's business was soaring. But now, the company's movies, parks and resorts and cable businesses are facing some of the strongest pandemic-related headwinds in the entertainment industry.

  • The company recently laid off 28,000 people at its theme parks and experiences and consumer products divisions as a result of park closures in California and partial reopenings around the world.
  • Its blockbuster live-action remake of the Disney classic "Mulan" was made available to Disney streaming subscribers last month due to paltry theater attendance and closed venues, but the company never revealed how it fared with streaming. Future films, like its new Pixar animated series "Soul," will also debut via streaming.
  • Advertising revenues from its cable networks continue to experience declines due to pandemic-related pressure to the advertising market.

Go deeper

Dec 16, 2020 - Economy & Business

Roku and AT&T reach agreement to distribute HBO Max

Photo Illustration: Igor Golovniov/SOPA Images/LightRocket via Getty Images

After a months-long battle, Roku and AT&T have finally reached an agreement to distribute AT&T's streaming service HBO Max.

Why it matters: Until now, Roku was the only TV platform that did not carry HBO Max. AT&T struck a deal to distribute HBO's on-demand subscription video service on Amazon Fire devices and Prime Video channels in November.

Virginia governor orders probe into pepper-spraying of Army officer

Virginia Gov. Ralph Northam at the Governor's Mansion in Richmond, Va. in 2019. Photo: Katherine Frey/The Washington Post via Getty Images

Virginia Gov. Ralph Northam (D) announced Sunday he's ordered the state police to conduct an independent investigation into a traffic stop during which two officers pepper-sprayed and drew guns on an Army lieutenant.

Driving the news: Caron Nazario, who is Black and Latino, is suing the police officers over the incident, which attracted widespread criticism after video footage emerged. Northam said in a statement he found the incident "disturbing" and that it angered him.

Biden pollster urges blunt tax talk

Illustration: Aïda Amer/Axios

The top pollster for Joe Biden's presidential campaign is advising the White House to do something that often makes Democrats nervous: Talk loudly and proudly about raising taxes on the rich.

Why it matters: John Anzalone tells Axios his extensive polling and research has found that few issues receive broader support than raising taxes on corporations and people earning more than $400,000 a year.