Disney Is Turning Its Physical Media Business Over to Sony
The Walt Disney Company is planning on outsourcing part of its home entertainment division as Sony Pictures Entertainment will now manufacture, distribute, and market Disney’s DVDs, Blu-ray discs, and other physical media for the company.
As part of the new deal, Sony will also market, sell, and distribute Disney’s new releases and catalog titles to consumers through retailers in the United States and Canada.
The deal does not, however, extend to digital media. Disney will continue to manage video-on-demand, for example, in-house.
Disney believes that the new licensing model will allow the studio to offer physical film and television releases and respond to consumer demand more efficiently. The company also said that the new deal was consistent with its companywide strategies and transitions in other markets.
Physical Media Sales Continue to Decline
It is no secret that physical disc sales have long been in decline as more and more consumers have made the switch to streaming. Revenue for physical media dropped 28% in the first half of 2023 compared to the previous year.


Photo: Disney
As retailers like Best Buy discontinue the sales of physical media, profitability in the medium is waning. Earlier today, Disney announced that it was ending the Disney Movie Club, which had been responsible for some of the company’s most unique physical releases, after 23 years.
Are Layoffs Coming?
At this time, it is unclear if today’s deal with Sony will lead to restructuring or mass layoffs at Disney. According to Variety, however, Disney is expected to conduct an internal assessment across all business functions that support physical entertainment in conjunction with the Sony deal.


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