Disney crossed a key threshold in fiscal 2023, taking in more revenue from streaming than from linear TV for the first time.The media giant, meanwhile, is continuing to trim spending on film and TV content, with the total declining to $27.2 billion from $29.9 billion in fiscal 2022. That tally encompasses original titles for the film studio, streaming platforms and TV networks along with sports rights license fees.The new figures were disclosed this evening in the company’s annual report filed with the SEC. While the company earlier this month put out fourth-quarter and full-year numbers, by custom it follows with a more comprehensive and final 10-K filing.Efforts to rein in content costs have been accompanied by broader cuts of staff and other expenses, with some $7.5 billion in cost savings already recorded. CEO Bob Iger said earlier this month the company is eyeing total film and TV content spending of about $25 billion in the current fiscal year.Affiliate revenue in fiscal 2023 from Disney linear networks carried on cable, satellite and internet-delivered pay-TV systems was eclipsed by streaming for the first time. Across Entertainment and Sports, affiliate revenue came in just shy of $16.9 billion, down from $17.5 billion in fiscal 2022. Subscription proceeds from direct-to-consumer streaming outlets like Disney+, Hulu and ESPN+ jumped to $17.9 billion from $15.3 billion in the prior year.Like all programmers with a stake in the traditional pay-TV bundle, Disney is managing through a period of dramatic change. Local and national broadcast outlets and cable networks continuing to throw off significant cash but also are seeing steady viewership declines as consumers continue to flock to streaming. Iger last summer said linear networks “may not be core” to the company’s operations moving forward, and multiple suitors have emerged for the company’s local stations and ABC.Cord-cutting also took a toll on network penetration last fiscal year, with ESPN shrinking to 71 million households from 74 million in fiscal 2022. At its peak a little more than a decade ago, the sports powerhouse was just north of 100 million homes. The filing also notes, without naming names, a key carriage deal reached in September with Charter Communications. That pact encompassed mainstays like ESPN, ABC and the Disney Channel and also added some key streaming provisions, but it left Freeform, FXX and other networks without linear carriage on Charter, the No. 2 cable operator in the U.S.Disney recently reorganized itself into three divisions: Entertainment, Sports and Experiences, with the setup providing a new degree of visibility for ESPN’s results. CEO Bob Iger has been exploring a number of strategic options for ESPN and has said the company is looking for an investment partner to help it with distribution as it prepares to roll out a robust streaming offering including a popular range of live games, likely during the next couple of years.
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