The Walt Disney Co. recently announced its plans to implement a series of layoffs that would heavily impact its ABC network. The layoffs are being introduced as a part of a financial and budget restructuring on a much broader scale. While the exact number of layoffs that will take place has not been made lucidly clear, those close to the decision makers are estimated as many as 300 employees at ABC will lose their jobs. This restructuring strategy will literally impact 10 percent of Disney’s annual expenses, and the cuts are likely to start within the coming weeks.
There are some who have been monitoring the massive shifts in television programs and the rise of new technology that has changed the game, such as Netflix, who has become a major player in the game – being clearly in the driver’s seat. Not only has Disney pulled out of its deal with NetFlix, making them a competitor, but big names at ABC like the mega producer, Shonda Rhimes, are jumping ship and heading over to Netflix.
There is a great deal of speculation that this move by Disney represents a shift in how they view ABC as a core brand for the Disney company over the long-term. All of Disney’s core programming have taken considerable hits in ratings over the last couple of seasons, which is cause for concern. It is likely that Disney is attempting to position itself to compete with the more advanced program distribution technology being used by NetFlix, Hulu, Amazon, and now YouTube.
So, what do the layoffs mean for the industry in itself? It represents a key shift in how programming will be handled in the future, and it will like to be the beginning of a free agent type atmosphere where producers, writers, and directors will be selling their skills to the highest bidder, which will likely be Netflix. Although Netflix has denied attempting to build a monopoly in television programming, it is very likely that this is where things are headed – barring interference from the Government or a major merger of networks.
The truth is that Netflix is not only making a major move on television programming, but they are also impacting the film industry, causing film companies to create an alliance with Apple to offer a rental program that will offer access to new release within a couple of weeks of their release. The reason for this is that Netflix will be streaming them not long after that.
It is not clear how this will play out for viewers in the long run, but during the interim phase, viewers will have access to high-quality programming that they will be able to access at their leisure. Viewers will also benefit from the competition this will create. The problem with unmitigated monopolies is that the lack of competition opens the door for exorbitant prices as viewers will have nowhere to go to receive the access and quality that they get with Netflix. Maybe Disney is planning on becoming a player and challenging Netflix’s dominance in this area, and if that is the case, look for ABC to be dumped with the next three to five years.
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