Robert A. Iger
Chief Executive Officer at Walt Disney
Thank you, Alexia, and good afternoon, everyone. It's an extraordinary privilege to lead this remarkable company again, especially at the special moment in its history as we celebrate our centenary. Since I first became CEO in 2005, I've have guided The Walt Disney Company through two significant transformations. The first was to confer greater creative control and authority to our creative businesses and to focus on great brands and franchises. It was also aimed at embracing new technologies and expanding internationally that ultimately led to the acquisitions of Pixar, Marvel and Lucasfilm. Second transformation took place beginning in 2016, when we laid the foundation for Disney to become a true digital company. As we were planning to launch our streaming platforms, the opportunity arose to acquire numerous assets from Twenty-First Century Fox and that acquisition gave us a bigger library with more franchises, a broader global reach and a talented, experienced management team that enabled us to generate even more higher-quality content.
In 2019, Disney+ launched with nearly 500 films and 7,500 episodes of television from across the world with Disney. Three years later, its meteoric rise is considered one of the most successful rollouts in the history of the media business. Now, it's time for another transformation, one that rationalizes our enviable streaming business and puts it on a path to sustained growth and profitability while also reducing expenses to improve margins and returns and better positioning us to weather future disruption, increased competition and global economic challenges. We must also return creativity to the center of the company, increase accountability, improve results and ensure the quality of our content and experiences.
Now, the details. Our company is fueled by storytelling and creativity and virtually every dollar we earn, every transaction, every interaction with our consumers emanates from something creative. I've always believed that the best way to spur a great creativity is to make sure that people who are managing the creative processes feel empowered. Therefore, our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially. Our former structure severed that link and it must be restored.
Moving forward, our creative teams will determine what content we're making, how it is distributed and monetized and how it gets marketed. Managing costs, maximizing revenue and driving growth from the content being produced will be their responsibility. Under our strategic reorganization, there will be three core business segments, Disney Entertainment, ESPN and Disney Parks, Experiences and Products. Alan Bergman and Dana Walden will be Co-Chairman of Disney Entertainment, which will include the company's full portfolio of entertainment, media and content businesses globally including streaming. Jimmy Pitaro will continue to serve as Chairman of ESPN, which will include ESPN Networks, ESPN+ and our international sports channels. And Josh D'Amaro will continue to be Chairman of Disney Parks, Experiences and Products, which will include our theme parks, resort destinations and cruise line as well as Disney's consumer products, games and publishing businesses. These organizational changes will be implemented immediately and we will begin reporting under the new business structure by the end of the fiscal year. This reorganization will result in a more cost-effective, coordinated and streamlined approach to our operations and we are committed to running our businesses more efficiently, especially in a challenging economic environment.
In that regard, we are targeting $5.5 billion of cost savings across the company. First, reductions to our non-content costs will total roughly $2.5 billion, not adjusted for inflation. $1 billion in savings is already underway and Christine will provide more details, but in general, the savings will come from reductions in SG&A and other operating costs across the company. To help achieve this, we will be reducing our workforce by approximately 7,000 jobs. While this is necessary to address the challenges we're facing today, I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees worldwide and I'm mindful of the personal impact of these changes. On the content side, we expect to deliver approximately $3 billion in savings over the next few years, excluding sports. Christine will be providing more details during the call.
Turning to our streaming businesses. I'm proud of what we've been able to achieve since the launch of Disney+ just three years ago. We are delivering more content with greater quality in more ways, in more places and to larger audiences. Like many of our peers, we will no longer be providing long term subscriber guidance in order to move beyond an emphasis on short term quarterly metrics, although we will provide color on relevant drivers. Instead, our priority is the enduring growth and profitability of our streaming business. Our current forecast indicate Disney+ will hit profitability by the end of fiscal 2024 and achieving that remains our goal.
Since my return, I have drilled down into every facet of the streaming business to determine how to achieve both profitability and growth. And so with that goal in mind, we will focus even more on our core brands and franchises, which have consistently delivered higher returns. We will aggressively curate our general entertainment content. We will reassess all markets we have launched in and also determine the right balance between global and local content. We will adjust our pricing strategy, including a full examination of our promotional strategies. We will fine tune our advertising initiatives on all streaming platforms. We will improve our marketing, better balancing platform and program marketing, while also leveraging our legacy distribution platforms for marketing and programming. This may include greater use of legacy distribution opportunities to increase revenue and more effectively amortize content investment. And as I've said before, our new organizational structure will reestablish the direct link between content decisions and financial performance. This is one of the most important steps we can take to improve the economics of our streaming business.
There is a lot to accomplish, but let me be clear, this is my number one priority. We are focused on the success of our streaming business and the return it generates for our shareholders long into the future. Before I turn this over to Christine, a few comments about the quarter. James Cameron's Avatar: The Way of Water, which was easily the most successful film of the quarter has become the fourth biggest film of all time globally with close to $2.2 billion earned at the box office to date. The global popularity of this film will result in the creation of more opportunities for fans to engage with the franchise, which they've been doing in Walt Disney World's Pandora - The World of Avatar as well as in theaters globally and on Disney+ where the first films delivered very strong numbers. And today, I'm thrilled to announce that we will be bringing an exciting Avatar experience to Disneyland. We'll be sharing more details on that very soon. Avatar represents yet another core franchise for the company, and as you've seen time and time again, we have a unique way of leveraging creative success across multiple businesses and territories, and over long periods of time.
Speaking of our parks, we had an outstanding quarter in Q1 where we continued our purposeful efforts to control capacity to preserve guest experience. Last month, we also announced some price adjustments at our parks. We are listening to guest feedback and we are continuously working to improve the quality and value of their experience.
We're also proud of our creative success as we led all studios with the most Academy Award nominations, including two Best Picture nominations, Twentieth Century Studios' Avatar: The Way of Water and Searchlight Pictures' The Banshees of Inisherin. Marvel's Black Panther: Wakanda Forever received five Oscar nominations, and in addition to an $840 million run at the box office, it launched on Disney+ last week and it has quickly become one of the most successful Marvel films on the platform.
Looking ahead, we are excited about our fantastic lineup of new films coming to theaters this year, starting with next week's release of Marvel's Ant-Man and the Wasp: Quantumania followed by other highly-anticipated theatrical titles including The Little Mermaid, Guardians of the Galaxy Vol. 3, Pixar's Elemental, Indiana Jones and the Dial of Destiny and Disney's Haunted Mansion. Lucasfilms' The Mandalorian, the series that started it all for Disney+ will be back at the beginning of March for its highly-anticipated third season. And today, I'm so pleased to announce that we have sequels in the works from our animation studios to some of our most popular franchises, Toy Story, Frozen, and Zootopia. We'll have more to share about these productions soon, but this is a great example of how we're leaning into our unrivaled brands and franchises.
The Walt Disney Company also won more Golden Globes than any other entertainment company this year, a total of nine, including for Abbott Elementary, the first broadcast show to win a Golden Globe for Best Series in nearly a decade. Without question, we have a world-class television business that fuels both our linear channels and direct-to-consumer services, especially with the assets acquired through the Fox transaction. It goes without saying that the best shows lead to the most lucrative library and have the power to endure because of their quality. The Simpsons illustrates this perfectly. Disney+ launched back in 2019 with more than 30 seasons and it remains one of our top performers today.
Across the board, our television business is second to none, and that includes ABC News, which remains America's number 1 news network. The power of ESPN brand also continues to deliver for us. In calendar '22, ESPN linear ratings were up 8% overall and 14% in primetime, and we are also growing rapidly across our digital platforms. We're being selective in our rights renewals and continue to approach rights acquisitions with discipline and a focus on supporting both sides of ESPN's business, traditional linear, and digital. ESPN is more than just a network, and today, the team is harnessing innovative technology to deliver spectacular coverage and entertainment to audiences who have a deep connection to the brand and content.
Now, when it comes to investing in growth and returning capital to shareholders, we will take a balanced and disciplined approach as we did throughout my previous tenure as CEO when we invested in our core businesses and acquired new ones, bought back stock, and paid a dividend to our shareholders. As a result of the impact of the COVID pandemic, we made the decision to suspend the dividend in the spring of 2020. Now that the pandemic's impacts to our business are largely behind us, we intend to ask the Board to approve the reinstatement of a dividend by the end of the calendar year. Our cost-cutting initiatives will make this possible. And while initially, it will be a modest dividend, we hope to build upon it over time. Christine will provide more information on that.
And finally, on the topic of succession, the Board recently established a dedicated succession planning committee. The committee is chaired by Mark Parker who will become Chairman of the Walt Disney Company's Board following our Annual Meeting. I'm excited to work with him in his new capacity and I'm grateful to our outgoing board Chairman, Susan Arnold for her 15 years of tremendous service. Obviously, there's a lot going on, but as I said before, I'm truly excited to be back and to lead this great company through this necessary transformation. I'm grateful for our incredible talent and my exceptional leadership team.
And with that, I will turn things over to Christine.
