Two Walt Disney TV channels — the Disney Channel and Freeform (which was formerly known as ABC Family until January 2016) — have lost a total of about 4 million subscribers over the past three years as children are increasingly turning to digital entertainment mediums.
A report in The Wall Street Journal notes that ratings for Disney’s kids-oriented TV brands are plummeting as Netflix and YouTube have become de facto channels for younger viewers. Ratings for the Disney Channel fell 23% in prime-time among its core demographic during the first half of 2017, while Freeform — which targets teen viewers — was down 25%. The lost eyeballs also mean that exposure and sales for Disney merchandise — including toys and clothes — is likely to suffer.
Another reason for fledgling viewership is that neither of the above channels has had a breakout hit show in the past year. Some bigger bets — including Disney’s I Didn’t Do It and Best Friends Whenever, and Freeform’s Guilt and Dead Of Summer — failed to catch on.
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Disney is therefore trying to create more digital programming rather than focus on its fledgling TV efforts, executives told the Journal. However, TV is the company’s biggest money-maker, accounting for 30% of revenues and 43% of profits last year — 74% of which were generated by ESPN. Disney says that it will soon offer its channels — either individually or bundled together — as a digital package for consumers à la HBO Now.