Disney's recent challenges have created a complex landscape for the entertainment giant.
Yesterday's announcement of the closure of Lucasfilm's operations in Singapore (with its visual effects and animation studio Industrial Light & Magic) being wound down due to ‘industry economic factors’, is the latest blow to the company.
Disney first opened the studio in Singapore in 2006 to work on animated TV series Star Wars: The Clone Wars. Since, the studio have tapped locals to work on Hollywood blockbusters such as Jurassic World: Dominion and Marvel’s The Eternals.
Lucasfilm's exit from Singapore is part of a broader restructuring strategy undertaken by Disney, with more than 300 people being affected by the closure.
The conglomerate, under chief executive Bob Iger's leadership, has aimed to cut costs and make its streaming business profitable—as Disney+ subscribers dropped for the third consecutive quarter, with a 7.4% decrease in subscribers compared to the previous quarter.
The decline was primarily driven by losses in Disney+ Hotstar's user base in India, which faced a 24% reduction due to the loss of rights to Indian Premier League cricket matches.
To counter this, Disney plans to raise prices for its ad-free streaming service in the US and introduce Disney+ with advertisements in Canada, the UK, and Europe.
Amidst the backdrop of subscriber losses, Disney's parks, experiences, and products division managed to shine with a 13% rise in revenue to $8.3 billion. However, attendance and revenue dips were observed in domestic locations like Walt Disney World in Florida.
Disney's exploration of artificial intelligence (AI) is another noteworthy aspect. Despite ongoing debates about AI's impact in Hollywood, the company's creation of an AI task force underscores its commitment to integrating AI across various segments, from theme parks to advertising.
The company's foray into AI is exemplified by the 11 job openings aimed at recruiting AI experts.
The move into AI comes off the back of Disney's metaverse endeavors have been a rollercoaster journey. The company initially announced metaverse-focused strategies within its storytelling and consumer experiences unit. However, the recent departure of Michael White, a key figure in this division, coincided with a broader restructuring process that led to the entire team's layoffs.
In a more legal realm, Disney is now facing a lawsuit from film financier TSG Entertainment Finance. The suit alleges that Disney hindered a deal between 20th Century Studios and TSG, aiming to boost Disney+ and Hulu subscriptions, stock prices, and executive compensation.
The dispute revolves around alleged “Hollywood Accounting” practices, where studios are accused of shortchanging profit participants.