What’s Next for Disney After a Record Quarter?
According to Reuters, the company’s interactive unit has lost over $750 million in the past three years. A long list of acquisitions has created costly redundancies, and some old revenue streams, like home video sales, are drying up. As a company spokeswoman put it: “We are constantly looking at eliminating redundancies and creating greater efficiencies, especially with the rapid rise in new technology.”
Just because the finances are in order doesn’t mean they can be left alone. In its last financial release, the company pointed out that an increase in rates for sports programming has driven up costs. Cable and broadcasting competitors like News Corp (NASDAQ:NWS)(NASDAQ:NWSA) and Time Warner (NYSE:TWX) can sympathize. Each company has been jockeying for a superior position in the increasingly-expensive — but increasingly lucrative — sports broadcasting market.
Disney Media Networks revenues for 2012 grew 4 percent to $19.4 billion. With ESPN under its belt, Disney is likely to drive efficiencies in this segment in light of growing competition. Layoffs in 2011 and 2012 at the interactive group and studio, and cuts at its publishing unit last year could foreshadow further restructuring.