A pair of media analysts have encouraged the Walt Disney Company to relegate more of its programming to streaming apps in order to avoid undue government scrutiny.
The note, penned by Needham analysts Laura Martin and Dan Medina, comes about two weeks after ABC decided to put its late night program “Jimmy Kimmel Live” on hiatus amid criticism from Federal Communications Commission (FCC) Chairman Brendan Carr and two large owners of ABC affiliated stations, which focused mainly on Kimmel’s political monologue aired two days earlier.
The controversy comes at a time when Disney has already started moving some of its premium content like “Dancing with the Stars” and a handful of National Football League (NFL) games to its streaming platforms like Disney Plus, Hulu and ESPN Plus, a move that has drawn the ire of some ABC affiliate groups in recent years.
Martin and Medina said Disney is unlikely to wind down ABC as a broadcast network anytime soon, because its live sports rights continue to be lucrative for the broadcaster and its affiliates, and broadcast continues to have tremendous reach in the television industry.
Still, the tide is turning in favor of streaming, and Disney should consider putting more — not fewer — programs on its streaming apps. The likelihood of more government interference in Disney and ABC’s content distribution strategies is just one additional reason for the trend to continue, Martin and Medina wrote.
Rather than shutting down ABC, the analysts suggested selling the broadcast network would be a better approach. That move would not invite the same level of regulatory scrutiny as selling off local ABC-owned stations — Disney operates eight of them — which requires approval from the FCC.
Disney has not publicly commented on the analysis. The company has been under growing pressure to demonstrate long-term profitability in streaming while balancing its traditional media businesses, which remain a significant source of revenue but face structural challenges.
During its most-recent earnings report, revenue attributed to ABC, the Disney Channel, FX and other linear networks clocked in at $2.27 billion, down 15 percent compared to last year. Streaming accounted for $6.18 billion in earnings, a 6 percent jump from 2024.
