Disney Spent $1 Billion to Cancel Contracts, Get Content to Disney+ Faster

As part of its Q2 2022 earnings results webcast, The Walt Disney Company disclosed that they have been hard at work reacquiring content still licensed out to a third-party customer and that they were more than willing to pay the price to get out of the contracts.

According to its press release, Disney announced a $1-billion reduction in revenue “for the amount due to a customer to early terminate license agreements for film and television content delivered in previous years in order for the Company to use the content primarily on our direct-to-consumer services.”

Both Disney CEO Bob Chapek and CFO Christine McCarthy made it clear that the price point was worth it in order to have “our content on our direct to consumer services.”

While it is still unclear which “customer” was owed the early cancellation fees, it should be mentioned that the middle of Disney’s second quarter saw the parade of Marvel Cinematic Universe content like Daredevil, The Punisher, and Jessica Jones suddenly leaving Netflix and coming to Disney+. But it could be any number of TV Shows or movies for Disney Plus Hulu or ESPN+ that were stuck streaming on any other streaming service from Netflix to Amazon Prime.

Read More: Disney+ Update: ‘Daredevil,’ More Marvel Shows Returning from Netflix

Despite the exorbitant cost, The Walt Disney Company was still able to grow 23% in the second quarter and 29% over the past six months. However, quarterly Direct-to-Consumer losses increased from $600,000 to $900,00 due, in part, to “higher programming and production, marketing and technology costs” at Disney+.

Disney Plus remains the home of Disney, Pixar, Marvel, Star Wars, and National Geographic content, and more.

It should be noted that Disney’s second fiscal quarter ended on April 2, 2022, which means that all of the supposed reactionary cancelations of Disney+ subscriptions due to Disney’s rush of “woke” decisions will not be taken into account until the Third Quarter Earnings Results come in.

We at Disney Fanatic will continue to monitor the story and will update our readers as more Disney+ news comes to light.