We've covered the studios and streamers pulling movies and TV shows and wondering if we could put a price on it. Well, now we have some public records with the tax write-offs Disney is taking, thanks to removing this hard work done by writers and directors.
There was an SEC filing on May 26, 2023, where Disney said it removed “certain produced content” from its streaming services and is taking a $1.5 billion impairment charge “to adjust the carrying value of these content assets to fair value.”
That means they are writing off that "loss" even though it was self-inflicted. Removing all those shows and movies actually saved them that much on their corporate taxes.
They took off more than 50 titles from streaming, and they're going to keep doing it. We can assume other studios are doing the same thing. Their mission is straightforward.
On an earnings call, Bob Iger said that he was "confident that we’re on the right path for streaming’s long-term profitability,” and working on “rationalizing the volume of the content we make and what we’re spending.”
Hollywood is at a crossroads where these streamers are finding ways to create deep libraries to attract people but also cut shows and movies to make sure they're not using their money to pay artists who didn't have hits. It's cutthroat, and it feels like it's going to blow up in their faces. People won't want to work with places that do this, and they're going to start building into their contracts that if they work with streaming their shows get left up, or they'll put a kill fee in that says if they get taken off they need to be paid.
Since streaming is so new, we're learning this all in real-time. We'll try to keep you updated as it all unfolds.
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