Candle Media Restructures Amid Broader Streaming Reset; Animation Folded Into Moonbug, Hello Sunshine Chief Sarah Harden To Run Rebranded Candle Studios

Candle Media, which launched in 2021 with backing from private-equity giant Blackstone, is restructuring its operations to reflect broader changes in the streaming sector.

The company, led by former senior Disney execs Kevin Mayer and Tom Staggs, will split into two divisions and make other related changes. Candle’s formation was premised on the opportunity for streaming content fueled by social media. At the time, streamers were chasing Netflix and adding subscribers as they piled up losses; in the intervening years, Wall Street insisted on profitability instead of subscriber growth, punishing a number of players and casting a wary eye on the go-go spending it once admired.

The broader economy also grew turbulent in the years since Candle’s launch, with interest rates surging and inflation spiking. Rising rates cast Candle’s $1.4 billion of debt into a different light. During an early spree, Candle made a number of high-profile acquisitions, including those of Reese Witherspoon’s Hello Sunshine and CoComelon producer Moonbug Entertainment.

Citing dramatic changes in the overall entertainment landscape, especially streaming, the company said it would fold its animation operation into Moonbug. Most other production will move to a new live-action division called Candle Studios, to be run by Hello Sunshine chief Sarah Harden. The new studio will encompass production companies Exile, True Stories, and Fauda creator Faraway Road. Hello Sunshine is the anchor tenant, having produced Hulu’s Little Fires Everywhere and Apple’s The Morning Show.

Mayer detailed the company’s updated strategic plan in an interview with Semafor published Tuesday. The article did not detail the impact on the company’s workforce of the restructuring, including the potential for layoffs.

In addition to the restructuring, Mayer said Candle is also undertaking a number of cost-efficiency initiatives in addition to the restructuring, including combining certain back-office functions. “We paid at the top of the market,” Mayer told the outlet. “Have the financials borne out the way we would like, to have to support the prices that we paid? Probably not.” But he said: “Talk to us in two or three years.”

The dual Hollywood strikes of 2023 also dealt a serious blow to Candle.

Mayer, who experienced a number of peaks and valleys (though mostly the former) during his run at Disney, is not sounding any alarms. “There’s cycles in any company where you’re in a growth phase, you accumulate a little bit of extra cost but it doesn’t matter,” Mayer said. “And then you hit a plateau that causes you to look again at the bottom line and cut costs. It’s a very healthy thing to do.”