Disney says Toy Story and Frozen sequels on the way as streaming numbers fall

Disney chief executive Bob Iger has announced sequels for Toy Story, Frozen and Zootopia as he detailed plans to turn around its streaming business.

Mr Iger said that Disney's animation studio has sequels "in the works".

Meanwhile, the firm revealed its first fall in subscriber numbers since its Disney+ streaming service launched in 2019.

And Mr Iger said he would cut 7,000 jobs in a major shake-up of the entertainment giant.

In a call to investors, Mr Iger spoke about his plans to monetise some of its biggest franchises.

"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," he said.

"We'll have more to share about this production soon, but this is a great example of how we're leaning into our unrivalled brands and franchises."

The latest instalments would be the third in the Frozen franchise and a second Zootopia. There have already been four Toy Story films as well as last year's spin-off Lightyear.

The announced job cuts amount to around 3.6% of Disney's workforce around the world and are part of a plan to save $5.5bn (£4.5bn) and make its Disney+ streaming service profitable. Mr Iger said he did "not make this decision lightly".

The changes came alongside its latest quarterly figures, his first since he returned to Disney in November.

Mr Iger said the changes would "better position us to weather future disruption and global economic challenges".

Disney reported an 8% rise in sales to $23.5bn between October and December last year. Profit also rose by 11% to $1.3bn.

However, Disney+ reported a $1.5bn loss and its subscribers fell by around 2.4 million to 161.8 million.

The plan will see the company restructure into three segments - entertainment which will include film, TV and streaming; sports-focused ESPN and Disney parks, experiences and products.

"This reorganisation will result in a more cost-effective, co-ordinated approach to our operations," Mr Iger told analysts on a conference call.

The company's streaming service remained its top priority, he added.

Disney's share price rose by more than 5% in after-hours trading following the announcement.

Disney hasn't had the success it might have wished for in creating new animated franchises over the past few years.

Its first big post-Covid release Strange World was a box office failure. And while the film did much much better on Disney+, it's likely that it was watched and enjoyed more by existing subscribers, rather than encouraging new viewers to join the service.

So it's no huge surprise to see these sequels being announced. One of Bob Iger's key strategies in his previous stint running Disney was to maximise the use of popular properties in its existing back catalogue.

The last instalments of Toy Story and Frozen both took more than $1bn at the global box office, as did Zootopia (Zootropolis in the UK). So it was perhaps inevitable that Disney would return to them at some point.

Announcing them all at the same time (although we don't know when they're likely to be released) is a clear signal to shareholders and audiences that at a time when Disney is cutting jobs and looking to make savings, it will continue to pour resources into areas that have served it well in the past.

No doubt it hopes that as well as performing well at the traditional box office, well-known titles like this will also help to drive increasing numbers to Disney+.

Freddy Colquhoun, investment director at JM Finn, told the BBC: "Disney has been in quite a bit of trouble over the last year or so and in particular with trying to make its streaming business profitable."

But he said the results "were actually really reassuring" and beat expectations.

Disney's changes address some of the criticisms raised in recent months by billionaire activist investor Nelson Peltz, who criticised the company for overspending on its streaming business.

In an interview on Thursday with the business broadcaster CNBC Mr Peltz said he would no longer seek a seat on the board to push for change.

"This was a great win for all the shareholders. Management at Disney now plan to do everything that we wanted them to do," he said. "We will be watching, we will be rooting and the proxy fight is over."

Mr Iger made a shock return as Disney's chief executive, less than a year after he retired from the firm.

He was brought back to steer the company through turbulent times after its share price plummeted and Disney+ continued to make a loss.

Mr Iger, who had previously headed Disney for 15 years, replaced Bob Chapek, who took over as chief executive in February 2020.

Mr Chapek was ousted after Disney's streaming business posted a $1.5bn quarterly loss.

Less than 24 hours after his return to Disney, Mr Iger said he was planning a major shake-up of the business.

At the time he said he had tasked a group of executives with designing "a new structure that puts more decision-making back in the hands of our creative teams and rationalises costs".