Dana Walden Reveals Her Plan

Hulu just won 50 Emmy Awards in a single year. That’s a real thing that just happened.

The streaming service anchored Disney’s most successful awards season ever, with the entertainment division claiming 60 total Emmys.

One person is responsible for all that success, and it’s the Co-Chairman of Disney Entertainment, Dana Walden.

Walden handles what we’ve historically called the television side of Disney, while Alan Bergman oversees the film division.

As you know, television has grown substantially more complicated during the streaming era.

So, in the lead-up to a record-setting Emmy campaign, Walden sat down for some interviews to explain her success.

In the process, Dana Walden revealed her plan for Disney. Here’s what we just learned about Bob Iger’s potential successor.

The Course Correction

Disney’s Direct-to-Consumer (DtC) division lost a ton of money during its earliest days. Maybe you heard about it…

Former Disney CEO Bob Chapek lost his job when DtC reported losses of nearly $1.5 billion in a single quarter.

When Bob Iger returned, he faced a division in turmoil. Everyone expected DtC to become Disney’s bread-winner.

In late 2022, the division had lost $4 billion in a single fiscal year, though.

So, Iger met with Walden and reset her priorities. As the article explains, Walden needed DtC to start making money.

While Chapek pushed for everything digital at Disney, the budget woes technically fell on Walden’s balance sheets.

Iger asked her to focus on bringing budgets under control and, eventually, turning a profit.

Remarkably, Walden achieved this goal in 18 months, as DtC has earned a modest amount of money in the last two quarters.

We’re not talking about a huge amount of revenue, but it’s night and day better than a $4 billion loss.

When asked about how Walden managed the feat of delivering quality on a budget, the executive acknowledged budget cuts.

However, the Co-Chairman offers an insightful response about how she makes it work.

“We’ve never been an organization that chased volume. We’ve always preferred curation.

That’s a polite, professional way of rejecting Chapek’s approach to content, which was basically “Greenlight everything!”

Now, Walden must make more decisions about the programs with the best potential rather than throwing everything against the wall to see what sticks.

As a longtime executive, that’s actually where Walden’s professional experience lies, but Chapek altered it with the gold rush approach.

Once again, Walden is being more selective and contemplative, with the results speaking for themselves.

Playing the Hits

Obviously, many of the questions Walden receives these days are about The Bear, Only Murders in the Building, and Shogun.

Walden played an integral role in the development of all three. In fact, Deadline recently shared a fascinating anecdote about one.

The original plan for Only Murders in the Building called for another cast member of similar age to Steve Martin and Martin Short.

Walden suggested someone younger, which led to the show’s key component, Selena Gomez. Walden is that good at her job.

When asked to explain the success of these shows, the television executive explains her philosophy:

“Quality endures and breaks through. That’s across every category of programming.

That’s a north star for Walt Disney Co., and it’s true certainly for FX. Look at the year they are having.”

Note that FX is technically the cable channel responsible for these programs, even though they stream on Hulu.

That’s just a small part of the unusual structure Walden faces as Disney pivots from linear networks to streaming.

The old guard remains, and Walden must operate within the confines of that somewhat archaic infrastructure.

She’s succeeding anyway, which is like putting on body weights before climbing a mountain.

Some may wonder why FX even exists at this point, but Walden provides an explanation.

“FX is a brand that stands for quality. It’s well-established. We have an extraordinary team that’s been together a long time.

We worked very hard to create a brand that matters. I believe it does matter to consumers.”

Two years ago, David Zaslav infamously devalued the HBO brand during his takeover of Warner Bros. Discovery.

Walden has taken the opposite approach, which explains why she’s so much better at her job than Zaslav.

Correcting Disney Entertainment’s Problems

Disney’s DtC division faces some existential problems beyond the revenue stream concerns.

While Disney+ started with the most success of any streaming service ever, it has somewhat lost momentum.

The metrics I’m using for that statement are viewer totals, according to Nielsen’s The Gauge.

Streaming has reached an all-time high with 40 percent of viewers consuming media that way.

Hulu currently claims an impressive three percent of the total market share, a total that dwarfs Paramount (1.1%), Peacock (1.2%), or Max (1.4%).

The problem is that Hulu’s consumption is also 50 percent higher than that of Disney+, which is currently two percent of the total market.

If things were going well, Disney+ viewer totals would be increasing at a constant rate.

We have two very good explanations for that behavior. The first is that the Hollywood strikes delayed new programming.

So, several projects planned for 2024 haven’t even debuted yet. Agatha All Along is an excellent example of this.

The other reason, as we previously discussed, is that Disney cut corners to get DtC’s balance sheet under control.

That decision also reduced content, which has left Disney+ pretty thin overall. Then, we have the side issue of stuff like The Acolyte bombing.

In short, Disney+ has had a tough year. Walden explains what she’s doing to force a course-correction here.

“(We’ll improve Disney+ with better) programming and technology, and we’re moving forward on both fronts.

Think about Hulu on Disney+. We’re moving in the right direction.

We see Disney+ subscribers increasing their engagement because they are watching the Hulu content.”

Walden’s referencing the successful integration of the Hulu tile on Disney+, which increases engagement for the latter service.

On a side note, that’s why Disney HAD to purchase complete control of Hulu from Comcast.

Walden Reveals Her Plan

During the conversation, Walden repeatedly points out ways that Disney is improving.

Much of the discussion involves the recent DirecTV dispute.

When asked about Disney’s gains here, Walden flatly states, “Yes. As part of this deal, we entered into a wholesale agreement.”

So, DirecTV will pay Disney for its streaming services, which the former company will soon provide to its customers.

DirecTV’s pivot toward streaming reflects the changing marketplace dynamics and raises a question.

When will linear networks stop being worth the aggravation? Walden explains her and thereby Disney’s thinking here:

“We look at our entire distribution ecosystem and how can we monetize our content in a way that enables us to keep investing at the right level so our content is undeniable.”

Later, the executive adds, “We continue to ramp up investment in places where we think viewership can grow. I would include broadcast in that bucket.”

That’s the head of Disney Entertainment flatly stating that the company isn’t abandoning the cable television model anytime soon.

Walden Reveals Her Plan Part II

However, streaming is Walden’s focus these days, and she punctuates this point by revealing an upcoming feature.

In a few months, Disney+ will add four new channels to its service.

Some of the content, like Hallowstream, is seasonal, while the rest is not.

Hits and Heroes will highlight Disney’s action content like Star Wars and Marvel titles.

Throwbacks will curate some of the many Disney/Fox/Pixar titles that trigger pop culture nostalgia.

Finally, Disney+ will add Real Life, a section emphasizing the service’s documentaries and biopics.

Again, the goal here is engagement. Content overload is a thing, with the sheer volume of available choices often paralyzing customers.

Walden envisions Disney+ as solving its engagement problem by gently hinting at what viewers should watch.

Netflix already does this and even offered a “Play Something” option at one point that chose shows or movies for customers.

Disney won’t be that aggressive, but these curated selections will highlight the vast content libraries available on its streaming service.

Walden’s plan isn’t to fight Netflix head-on for streaming supremacy.

Instead, the Co-Chairman sounds perfectly comfortable carving out a sizable, loyal market niche for Disney.

That’s the savvy, frugal approach that will bring more viewers while keeping the balance sheet showing steady gains.

Walden’s really good at this, and her skill is how she has differentiated herself as the clear frontrunner to succeed Iger as Disney CEO.

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Feature Photo: Variety