According to a new report, Disney is taking a $1.5 billion write-off due to its content removal from Disney+ and Hulu.
The company revealed in May that it would implement several measures to compensate for its loss of four million subscribers, such as increasing the fee for an ad-free Disney+ subscription, creating a single app that combines Disney+ and Hulu’s content, and withdrawing various titles from both streaming services.
A new SEC filing (via Variety has disclosed that Disney is taking a $1.5 billion write-off from its content removal from Disney+ and Hulu, which was announced last month.
Moreover, CFO Christine McCarthy stated in earnings call this week that the write-off could reach $1.8 billion to lower the studio’s tax liability, which is reportedly related to possible further withdrawal of content made exclusively for the streaming platforms.
Disney has faced backlash in the past month for withdrawing various titles from Disney+ and Hulu, similar to what Warner Media has done for nearly a year.
Since late May, 52 titles have been removed from both streaming services, including the acclaimed sequel series to Willow, which halted its season 2 production shortly before the removal, the well-received Rosaline and the action-thriller The Princess starring Joey King, and Bryan Cranston’s The One and Only Ivan, among others.
The studio is expected to take $1.5 billion in write-offs from this initiative, which implies that more content could be removed from Disney+ and Hulu in the near future. However, it’s unclear which titles are at risk of being eliminated.
Many of the movies and shows that have been withdrawn so far have been cancelled series or standalone films that may not attract repeat viewers. But the removal of Willow, a Lucasfilm-produced sequel series with a planned future, indicated that even high-profile content could be affected.
Disney’s large write-off for its content removal from Disney+ and Hulu could prompt other streamers to follow suit, which could be detrimental to both creators and consumers.
This comes as WarnerMedia continues to remove more HBO Max content with the launch of Max, and with Netflix reportedly planning to cut its spending on original content.
However, with Netflix shareholders rejecting a bonus package for execs that was twice as much as what the WGA is demanding in the ongoing writers’ strike, there is hope that this negative trend will change soon.