We have previously discussed how studios and streamers are pulling movies and TV shows, and the question arose of whether we could quantify the financial impact of these actions. Now, public records have surfaced revealing the tax write-offs Disney is claiming as a result of removing content that was the result of hard work by writers and directors.
Disney Takes a $1.5 Billion Content Write-Off After Removing Shows From Their Platform
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Art meets billions in commerce.
We have previously discussed how studios and streamers are pulling movies and TV shows, and the question arose of whether we could quantify the financial impact of these actions. Now, public records have surfaced revealing the tax write-offs Disney is claiming as a result of removing content that was the result of hard work by writers and directors.
In an SEC filing dated May 26, 2023, Disney stated that it had removed “certain produced content” from its streaming services and was taking a $1.5 billion impairment charge to adjust the value of these content assets to fair value.
Essentially, Disney is writing off this “loss,” even though it was a consequence of their own actions. By removing these shows and movies, they have actually managed to save a significant amount on their corporate taxes.
Disney has already removed over 50 titles from streaming, and they plan to continue doing so. It is reasonable to assume that other studios are adopting similar strategies. Their objective is clear-cut.
During an earnings call, Bob Iger expressed his confidence in the long-term profitability of streaming and mentioned their efforts to rationalize the content volume and expenditure. This reflects a trend in Hollywood where streamers are striving to build extensive libraries to attract viewers while simultaneously cutting shows and movies to avoid paying artists who did not achieve significant success. This cutthroat approach may backfire, as it could deter talented individuals from working with such platforms. In response, artists may start negotiating clauses in their contracts stipulating that their shows remain available if they collaborate with streaming services, or they may include a kill fee provision that guarantees compensation if their content is removed. Since the streaming landscape is still evolving, we are witnessing these developments in real-time, and we will strive to keep you informed as the situation unfolds. Feel free to share your thoughts on this matter in the comments section.
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