Economy

British households have cancelled video subscriptions in record numbers as they curb non-essential spending to cope with the cost of living squeeze, reinforcing concerns that a pandemic-fuelled boom in streaming is over.Consumers walked away from about 1.5mn video on-demand accounts such as Disney Plus, Apple TV Plus and Now during the first three months of the year, according to figures from analytics group Kantar.While 58 per cent of households retain at least one streaming service, a decline of only 1.3 per cent from the end of 2021, the terminations suggest that viewers have become more discerning about subscribing to multiple platforms.A desire to save money was the most important reason for the cancellations and young adults have become particularly wary of paying for television on top of the £159 annual licence fee, the researchers found.The findings were “sobering” for streaming providers, said Dominic Sunnebo, global insight director at Kantar. He said streaming services had to prove their worth to consumers “in what has become a heavily competitive market”. Households are looking for ways to trim budgets to cope with rising bills. Surging energy, clothing and food prices pushed inflation to a 30-year high in March, data from the Office for National Statistics showed last week.Media investors have become increasingly concerned that the rapid worldwide growth of video streaming — encouraged by demand for home entertainment during the pandemic — has peaked.Shares in Netflix, which is due to release first-quarter earnings on Tuesday, have dropped 43 per cent so far this year as global subscriber numbers have disappointed.Consumers are re-evaluating subscriptions in response to higher charges. Several providers have raised prices in markets including the UK, in part to compensate for rising costs of labour and facilities that have made TV and film production more expensive.Among them is Netflix, which recently implemented its second round of UK price increases within 18 months, raising standard monthly subscriptions from £10 to £11.At the same time, options for British viewers have continued to widen. Recently introduced offerings include Peacock from Sky, which features content from NBCUniversal. Viaplay, the Scandinavian streamer, is planning to launch in the UK this year.Many consumers are still signing up for streaming services. Kantar’s research, which was based on interviews with 14,500 people, found that about 3 per cent of British households took out a subscription during the first quarter.However, this was a marked slowdown from the 4.2 per cent that did so in the same period a year ago.Cancellations, meanwhile, accelerated, from 1.2mn a year ago and from 1.04mn during the final three months of 2021.After budgetary concerns, the most frequently cited reasons given by those who terminated their subscriptions were that they did not use them often enough and that the platforms lacked new shows they wanted to watch.The net effect was for the number of households with at least one paid subscription to decline by 215,000 compared with the previous quarter, to 16.9mn.

Britbox, Apple TV Plus and Discovery Plus had the highest churn rate — meaning they lost the most users on a gross basis.Disney Plus had the biggest increase in its churn rate, Kantar said. Its quarterly churn tripled from the previous quarter to 12 per cent.Netflix and Amazon’s Prime Video had the lowest churn rates in the quarter. Kantar said this was a sign they were “the last to go when households are forced to prioritise”. More

The risk of a prolonged period of stagflation in the UK has increased after consumer prices surged more than expected while economic growth slowed to a crawl.Recent official and informal economic data have fallen short of analysts’ expectations, prompting many to warn about stagflation and even an economic contraction in the second quarter of this year. It comes as some experts say the government has not done enough to help households with the cost-of-living crisis resulting from soaring consumer price inflation. Opposition parties in parliament have also accused chancellor Rishi Sunak of providing inadequate support to Britons grappling with rising energy and food bills.Stagflation, which refers to slow growth in gross domestic product coupled to high inflation, is a relatively rare economic situation that puts great strain on consumers and businesses. Last week, official data showed that consumer prices increased at an annual rate of 7 per cent in March, the fastest pace since 1992. By contrast, growth in gross domestic product slowed to just 0.1 per cent in February, and real wages, adjusted for inflation, contracted by 1 per cent.The figures “highlight the risk of a stagflation-like episode for the UK economy”, said Paul Hollingsworth, economist at the consultancy BNP Paribas Markets 360. Ed Monk, associate director at the investment management company Fidelity International, said: “The spectre of stagflation stalks the UK economy.” Last month the Office for Budget Responsibility, the UK fiscal watchdog, predicted this year would mark the biggest squeeze on household real incomes since records began in the 1950s.Near real-time informal data highlight how consumers are tightening their belts amid the cost of living crunch.Trips to UK retail and entertainment venues, tracked by Google Mobility Data, have flatlined since mid-February. In mid-April, consumer confidence was down compared with last month, according to daily figures produced by Morning Consult. In the first week of April, spending on credit and debit cards for so-called delayable goods, such as clothing and furnishings, was still more than 10 per cent below levels recorded before the coronavirus pandemic, Bank of England data showed. This is despite not being adjusted for inflation. Most economists expect inflation to rise higher than 8 per cent in the second quarter, following April’s increase in the energy price cap for households set by the industry regulator, and possibly go higher when the ceiling is revised again in October.James Smith, economist at ING, forecast the economy will contract by 0.2 per cent to 0.3 per cent in the second quarter because of the squeeze on household incomes and falling output in the health sector owing to reduced Covid-19 vaccinations. Samuel Tombs, economist at Pantheon Macroeconomics, predicts a marginally larger contraction and expects the economy at the end of the year to be only 0.5 per cent larger than in February.“With the economy already close to flatlining, it would not take much to produce a month or two of falling output as the squeeze on household real incomes intensifies,” said Ruth Gregory, economist at Capital Economics.Thomas Pugh, economist at the consultancy RSM UK, raised the possibility of the economy falling into a recession — defined as two consecutive quarters of contraction.“With growth forecast to average just 0.1 per cent in each of the remaining three quarters of this year, it would not take much of a rise in oil prices or a disruption in supply chains to push the UK into recession,” he said. This could mean a lot more pain for consumers. Joanna Elson, chief executive of the charity Money Advice Trust, said one in eight UK adults reported having already gone without heating, water or electricity in the past three months.At the end of March, about nine in 10 adults said their cost of living had increased, data from an ONS survey showed, with about half reducing spending on non-essentials or cutting energy use at home. The fall in real wages could leave the average UK household about £900 worse off this year, according to calculations by Jake Finney, economist at the consultancy PwC. The lowest earners could see their incomes fall by as much as £1,300.Savings accumulated during the pandemic should help limit the blow, but these are concentrated among the richer households, “and government intervention to support households with little or no savings has been relatively limited to date”, said Sandra Horsfield, economist at Investec. The “currently strong” labour market could help mitigate the economic slowdown, said Silvia Dall’Angelo, economist at the investment management company Federated Hermes.However, she added that employment growth was already slowing and despite Sunak announcing some modest fiscal easing in recent months, “the fiscal stance for this year is restrictive overall”. Many companies are also struggling with rising costs and waning demand for their goods and services. Input prices for businesses rose by an annual rate of 19 per cent in March, ONS data showed, in the highest monthly increase since records began 20 years ago.Martin McTague, national chair of the Federation of Small Businesses, a lobby group, said the higher pace of input price growth compared with consumer price inflation shows “how small business owners are taking the hit directly — in a lot of cases, reducing their take-home pay or scaling back investment and expansion rather than passing on higher costs to customers”.More than four in five managers do not think the government has gone far enough to help UK businesses with rising costs, according to research by the Chartered Management Institute, a professional body. Anthony Painter, CMI director of policy and external affairs, said businesses were being squeezed as “they face a potential downtick in wider consumer confidence, and higher prices for materials, supply chain issues and higher production costs”. Sarah Seymour, owner of London-based Love Absolute Skincare, a beauty products company, said its sales were being hit by people having “less money in their pockets”.“Sometimes no money at all has come in,” she added. “The battle to survive for micro businesses like mine is real.”  More

The twin perils of slowing growth and high inflation, or stagflation, will hit the global economy this year as Russia’s war against Ukraine exacerbates a slowdown in the recovery from the coronavirus pandemic, according to Financial Times research. Mounting price pressures, slipping output expansion and sagging confidence will all pose a drag for most countries, according to the latest Brookings-FT tracking index. As a result, policymakers will be left with “grim quandaries”, said Eswar Prasad, senior fellow at the Brookings Institution. The IMF is this week expected to downgrade its forecasts for most countries as finance ministers and central bankers convene at the spring meetings of the fund and the World Bank to discuss how to respond to the darkening economic outlook. Policymakers must work out how to address rapidly rising prices and the dangers of raising interest rates when debt levels are already high. Kristalina Georgieva, IMF managing director, on Thursday called the war in Ukraine a “massive setback” for the global economy.Thanks for reading FirstFT Asia. Here’s the rest of the day’s news — SophiaThe latest from the war in UkraineMilitary briefing: Russia’s defence ministry demanded the surrender of Ukraine troops holding out in Mariupol, who have used the city’s network of tunnels to their advantage.Nato: Lithuanian president Gitanas Nauseda urges Sweden and Finland to join Nato, arguing that it would boost the security of the Baltic states and reinforce the western military alliance.Shipping and logistics: Russian trucks are stuck in long queues at the EU’s eastern borders following a ban on their vehicles which went into effect on Saturday.Wall Street: The number of failed trades in the US corporate bond market shot higher following Russia’s invasion of Ukraine, with investors linking the settlement problems to sanctions imposed after the war began.Finance: US banks last week detailed billions of dollars in potential losses from the war while warning that they saw no end in sight for market turbulence.Sanctions: The US has a “long playbook” of further Russia sanctions planned, said a senior state department official.Heritage: Ukraine is battling to protect its churches, historic sites and national monuments from the ravages of war.Opinion: Vladimir Putin once presided over a period of fast economic growth, but as the Russian economy stagnated, his regime has now reverted to a 20th-century dictatorship based on fear.Coronavirus digestSouth Korea lifts restrictions: Starting today, the midnight curfew as well as restrictions on private gatherings and large-scale events will be lifted in South Korea. The country has downgraded Covid-19 to a “Class 2” disease.Explainer: With the lockdown in Shanghai and more Asian central banks grappling with inflation, policymakers across the region nervously watch for slowed economic growth in China.Omicron’s impact: The way China reports infections and deaths is obscuring the true impact of the Omicron wave and complicating its public health response.Five more stories in the news1. How journalists crowdfunded their coverage of the war Crowdfunding platform Patreon is home to more than 3,000 contributors in Ukraine. Now the company, which was founded with artists and musicians in mind, could play an instrumental role in supporting independent journalism.

Under its editor Olga Rudenko, the Kyiv Independent English-language publication makes more than £50,000 a month from almost 7,000 patrons, making it one of the largest Patreon sites in Ukraine

2. China views Russian invasion as a ‘strategic utility’ The country is hoping to exploit a distracted west to focus on its competition with the US, and will welcome a prolonged war in Ukraine as a “rolling strategic diversion” from its own assertiveness, according to former Australian prime minister Kevin Rudd.3. Inflation surge slashes $11tn from world’s negative-yielding debt Bond prices have tumbled this year as central banks move to end large-scale asset purchases and raise interest rates in their battle with soaring inflation. The change is close to ending the era of negative-yielding debt — and wiping out negative yields entirely would mark a return to normality for a broad range of big investors.4. Shanghai residents clash with police Small protests have broken out in Shanghai as residents grow increasingly frustrated with Covid lockdown restrictions. Videos of desperate residents being physically restrained by police dressed in white personal protective equipment following a confrontation in the street were quickly erased from Chinese social media.5. TikTok under US government investigation The US Department of Homeland Security is investigating how TikTok handles child sexual abuse material, according to two sources familiar with the case. The Department of Justice is also reviewing how a specific privacy feature on the Chinese-owned social media app is being exploited by predators.The day aheadChinese economy The country’s National Bureau of Statistics releases its estimates for first-quarter gross domestic product growth.Bank of America The global financial services company will also release its Q1 results today.Boston Marathon The world’s oldest annual marathon takes place in Boston, Massachusetts, for the 126th time.Join us for the FT’s Crypto and Digital Assets summit on April 26-27. Register today to be part of a critical conversation with the world’s global financial and corporate elite, as they carve out the path ahead for bridging traditional finance and the crypto leaders of tomorrow.What else we’re readingIs the world truly unified against Russia? Initial euphoria over the west’s response to the war in Ukraine has ebbed, as even optimists are aware that unity could be fragile. Add to that the Global South’s indifference — the likes of India, South Africa and Brazil — and Moscow’s narrative of western hypocrisy, and the initial impression that the whole world had united in outrage against Russia was clearly misleading.A rude awakening for Elon Musk The world’s richest man cast himself as Twitter’s saviour, claiming that he would bring free speech back to the social media platform with his $43bn hostile takeover bid. But his pitch has fallen largely on deaf ears, as sceptics doubt the seriousness of Musk’s follow-through.The ‘grey resignation’ poses a problem Nearly 70 per cent of the 5mn people who left work in the US during the pandemic were older than 55. This may be a welcome development for younger people, but it has left an already-tight labour market with an even lower supply of experienced workers.Japan’s ‘new capitalism’ is a zeitgeisty thought with no bite According to leaks, the government is discussing changes to relieve listed companies from the burdens of quarterly reporting. The true extent of any changes is hazy, though — the real objective of these leaks was to posit new prime minister Fumio Kishida against a villainous “short-termism”, writes Leo Lewis.The best business books for April If you are looking for some reading this Easter weekend, our Work & Careers team have selected their favourite business books published this month. They include advice from entrepreneurs and a study of how flexible working can improve our lives and cities. GardeningFeeling inspired by the change of the season to try your hand at growing some veggies? Two new books, from Cinead McTernan and Mark Ridsdill Smith, aim to guide city dwellers through the unique challenges presented by growing crops amid concrete in small yards or on balconies.

Mark Ridsdill Smith in the balcony garden of his London flat © Sarah Cuttle More

BMW will not cut a single employee in the transition from combustion engines to electric models, its chief executive has pledged, even as economists predict tens of thousands of job losses across the industry.“We will not have job losses due to the transformation,” Oliver Zipse said. “At the end of the day, possibly already in this decade at our Munich plant, there will be fully electric production without anyone losing their job.”His comments come as the European auto sector, as well as leading economists, warn that plans to ban petrol and diesel cars will lead to mass unemployment.The VDA, which represents German car manufacturers, said last year that an EU proposal to ban new combustion-engine sales by 2035 was “almost impossible to achieve” and that the impact on jobs would be “significant”. A survey carried out on behalf of the VDA also found that more than 100,000 jobs would be at risk in Germany’s automotive sector if staff were not retrained.But Zipse said that BMW, which posted record profits in 2021 and is due to unveil its first electric limousine car, the i7, would train employees worldwide with the skills to work on battery-powered models.“It’s how you manage the transformation . . . a highly qualified workforce is able to adapt to almost any technology,” he said. “We want to keep our people because we are counting on their competencies.”Zipse, who is also head of the ACEA, the trade body for European automakers, stressed he was only speaking for BMW, which has adopted a flexible approach to electric manufacturing.

Rather than convert plants exclusively to produce electric vehicles, BMW is transforming factories step by step, and initially ensuring that combustion- engine, hybrid and electric versions of its models can be built on the same assembly lines, using the same staff.“We have a decade of transformation and the ground rule is: you have to locate the new technologies where the existing technologies are,” he said.“You have to talk to the people and explain to them how their job will change in the next five years. And when they are given a perspective, they will follow. So I think that is a manageable task.”So far, job losses in the German car industry have been largely confined to suppliers such as Continental, which is cutting 13,000 staff in the country.Clepa, which represents European suppliers, warned in December that half a million jobs could be lost under the EU’s current combustion engine phaseout plans. More

The twin perils of slowing growth and high inflation, or stagflation, will hit the global economy this year as Russia’s war against Ukraine exacerbates a slowdown in the recovery from the coronavirus pandemic, according to Financial Times research.Mounting price pressures, slipping output expansion and sagging confidence will all pose a drag for most countries, according to the latest Brookings-FT tracking index.As a result, policymakers will be left with “grim quandaries”, said Eswar Prasad, senior fellow at the Brookings Institution.The IMF is this week expected to downgrade its forecasts for most countries as finance ministers and central bankers convene at the spring meetings of the fund and the World Bank to discuss how to respond to the darkening economic outlook. Policymakers must work out how to address rapidly rising prices and the dangers of raising interest rates when debt levels are already high.Kristalina Georgieva, IMF managing director, on Thursday called the war in Ukraine a “massive setback” for the global economy.Prasad said there was a risk that 2022 could become “a fraught period of geopolitical realignments, persistent supply disruptions and financial market volatility, all against the background of surging inflationary pressures and limited room for policy manoeuvre”.The Brookings-FT Tracking Index for the Global Economic Recovery (Tiger) compares indicators of real activity, financial markets and confidence with their historical averages, both for the global economy and individual countries, capturing the extent to which data in the current period is better or worse than normal.In the twice-yearly series, the composite index shows a marked loss of growth momentum since late 2021 in advanced and emerging economies, with confidence levels also dropping from their peaks and financial market performance taking a dip more recently.Each of the world’s three big economic blocs faces considerable difficulties, Prasad said. While spending remains strong in the US and the labour market has returned to pre-pandemic conditions, inflation poses severe difficulties for the Federal Reserve’s mandate of price stability. The pace of price growth surged to a 40-year high of 8.5 per cent in March.“The Fed is at real risk of losing control of the inflation narrative and could be forced to tighten even more aggressively than it has signalled, raising the risk of a marked slowdown in growth in 2023,” Prasad said.

China’s problems stem from its desire to stick with its zero-Covid strategy after a surge in cases of the more infectious Omicron coronavirus variant. Lockdowns, such as the severe restrictions in Shanghai, threaten consumer spending, investment and production, while the potential to ease monetary policy again will amplify longer-term risks to financial stability.China is set to report first-quarter gross domestic product figures on Monday and they are widely expected to show that Beijing faces a tough challenge in meeting its 5.5 per cent growth target over the course of this year. For Europe, most exposed to the Ukraine conflict and struggling to reduce reliance on Russian energy imports, confidence levels have declined sharply.Prasad said there were no easy policy solutions and willingness to act appeared in short supply.“Keeping the global economy on a reasonable growth track will require concerted actions to fix the root problems, including measures to limit pandemic-induced disruptions, steps to tamp down geopolitical tensions and targeted measures such as infrastructure spending to boost long-term productivity rather than just fortify short-term demand,” he said. More

Will China’s zero-Covid policy slow its economic growth?Shanghai’s Covid-19 lockdown has cast a shadow over China’s economic outlook for the remainder of 2022. Investors will pay special attention to this week’s reading on first-quarter gross domestic product, which will set the tone for how aggressively policymakers in Beijing will need to act to prop up the world’s biggest emerging market.The lockdown in Shanghai — China’s financial capital — began in late March, meaning its full impact will not be recorded in the first quarter report. However, the GDP data will provide clues on the extent to which the coronavirus flare up has hit China’s economy since it will include less severe lockdowns in the manufacturing hubs Shenzhen and Jilin. Economists polled by Reuters expect gross domestic product for the first quarter to notch a year-on-year rise of 4.4 per cent. Dhiraj Nim, an economist at ANZ, says the headline reading will mask a far weaker quarter-on-quarter rise expected to come in at just 0.6 per cent, better reflecting the drop-off caused by earlier lockdowns enforcing China’s zero-Covid strategy.“This stance has also led to recent lockdowns in Shanghai as the pandemic spread, exacerbating downside risks to second-quarter GDP,” Nim said. He does not expect China to bring the current outbreak under control until the end of April, a scenario that ANZ anticipates will drag annual GDP growth this year down to just 5 per cent from 8.1 per cent in 2021.But he adds that “if China’s slowdown turns out to be deeper, it will force a relook at the growth outlook for the region’s economies”. ANZ estimated that for every 1 percentage point fall in the country’s growth over the past 15 years, growth in the rest of Asia fell 0.6 percentage points. With more Asian central banks now grappling with surging inflation, policymakers across the region will be even more sensitive than usual to any drop-off in Chinese growth. Hudson LockettWill raging inflation crimp UK retail sales?UK retail sales are set to weaken in the coming months as Covid-19 restrictions are eased, with consumers shifting back to spending more on services and less on goods as they reduce expenses in response to the cost of living crisis.“A normalisation of spending patterns back towards activities such as eating out and going to the cinema is likely to mean less spending in the retail sector,” said Martin Beck, chief economic adviser to EY Item Club.In February, Britons spent 0.7 per cent more than in the previous month in sterling terms, but bought 0.3 per cent less in terms of quantity as goods became more expensive. Volumes are forecast to have fallen by the same margin in March as consumers contended with a surge in consumer price inflation to 7 per cent, a 30-year high.“Some households may be able to dip into savings accumulated during the pandemic,” said Beck, “but many won’t have that luxury. So, retail demand is likely to come under increasing pressure as we move through 2022.”Bethany Beckett, economist at Capital Economics, also expects the coming months “are only likely to get more difficult for retailers as the cost of living crisis begins to have a bigger impact”.Consumer confidence dropped significantly in March and high inflation could mean a prolonged period of negative real wage growth. “Against that backdrop, it seems all but inevitable that households will continue to pare back spending,” said Beckett. Valentina RomeiHow is the war in Ukraine affecting the eurozone economy?European Central Bank president Christine Lagarde did not mince her words. Russia’s invasion of Ukraine, she said last week, could yet prove more damaging to business confidence and investment than the pandemic. April’s S&P Global purchasing managers’ index, set to be released on Friday, will reveal the extent to which European companies are already feeling an impact.Russian president Vladimir Putin’s decision to invade Ukraine in late February has sent prices for food and energy soaring, pushing eurozone inflation to a record 7.5 per cent last month. Some analysts worry Europe could be heading towards a recession or 1970s-style stagnation — a period marked by rapid inflation and a sluggish economic expansion.Economists expect the composite eurozone PMI, which combines responses from senior executives at service and manufacturing companies, will fall to 54 in April from 54.9 in March. A mark above 50 indicates a majority of respondents reported an expansion. In a sign of how the conflict in eastern Europe is already weighing on market sentiment, German investor confidence — measured by the Zew research institute’s economic sentiment index — last week fell to its lowest point since March 2020.“The picture doesn’t look especially rosy,” said Caspar Rock, chief investment officer at Cazenove Capital. “It would not surprise me at all if the print dipped below 50.” George Steer More

The leftist leader has sought to concentrate more power in the hands of the state and touts the legislation as vital to his plans to “transform” Mexico. The United States, Mexico’s biggest trading partner, has criticized the reforms.An alliance of opposition parties has also ruled out supporting the legislation, meaning the government looks likely to fall short of the two-thirds majority required for approval.But Lopez Obrador, seeking to leverage his victory in last weekend’s referendum on his leadership, has vowed to plow ahead and suggested those who oppose his signature legislation are “traitors.”The president argues that past governments rigged the market in favor of private interests, and said the reform would improve Mexican independence from foreign-owned producers.Lopez Obrador has pitched the overhaul as needed to keep a lid on energy prices by giving state-owned electricity company Comision Federal de Electricidad (CFE) more control over the power market. CFE plants, whose prices are under government control, would get to sell their electricity before other generators. The president’s overhaul would move energy regulation from independent bodies to state regulators, rolling back previous constitutional changes. CFE, meanwhile, would generate 54% of the country’s total electricity and would no longer have to send the cheapest electricity first.But business groups and several of Mexico’s closest allies have flagged concerns about his energy legislation, arguing it breaches the regional trade deal, the United States-Mexico-Canada Agreement (USMCA).In a win for Lopez Obrador, Mexico’s Supreme Court earlier this month upheld contentious changes to electricity legislation passed last year after they were blocked by lower courts. The court found a majority of justices voted to strike down key parts of the bill but did not reach a two-thirds majority required to declare them unconstitutional. However, in an indication of legal disputes that may lie ahead, opposition Senator Emilio Alvarez Icaza this week filed a challenge to that process. The reform would also nationalize Mexico’s lithium. If the constitutional overhaul fails, Lopez Obrador said that he would send another bill to Congress to secure Mexico’s lithium to ensure that at least part of the bill succeeds. More

The entertainment behemoth spent decades avoiding even the whiff of controversy. But it has increasingly been drawn into the partisan political fray.Since its founding in 1923, Disney has stood alone in Hollywood in one fundamental way: Its family-friendly movies, television shows and theme park rides, at least in theory, have always been aimed at everybody, with potential political and cultural pitfalls zealously avoided.The Disney brand is about wishing on stars and finding true love and living happily ever after. In case the fairy tale castles are too subtle, Disney theme parks outright promise an escape from reality with welcome signs that read, “Here you leave today and enter the world of yesterday, tomorrow and fantasy.”Lately, however, real world ugliness has been creeping into the Magic Kingdom. In this hyperpartisan moment, both sides of the political divide have been pounding on Disney, endangering one of the world’s best-known brands — one that, for many, symbolizes America itself — as it tries to navigate a rapidly changing entertainment industry.In some cases, Disney has willingly waded into cultural issues. Last summer, to applause from progressives and snarls from the far right, Disney decided to make loudspeaker announcements at its theme parks gender neutral, removing “ladies and gentlemen, boys and girls” in favor of “dreamers of all ages.” But the entertainment giant has also found itself dragged into the fray, as with the recent imbroglio over a new Florida law that among many things restricts classroom instruction through third grade on sexual orientation and gender identity and has been labeled by opponents as “Don’t Say Gay.”At first, Disney tried not to take a side on the legislation, at least publicly, which prompted an employee revolt. Disney then aggressively denounced the bill — only to find itself in the cross hairs of Fox News hosts and Florida’s governor, Ron DeSantis, who sent a fund-raising email to supporters saying that “Woke Disney” had “lost any moral authority to tell you what to do.” Florida lawmakers began threatening to revoke a 55-year-old law that enables Walt Disney World to essentially function as its own municipal government. (Disney had already been at odds with the governor on pandemic issues like a vaccine mandate for employees.)In trying to offend no one, Disney had seemingly lost everyone.Disney employees and supporters, at a park in Burbank, Calif., last month, protested Disney’s reaction to a new law in Florida.J. Emilio Flores for The New York Times“The mission for the Disney brand has always been really clear: Do nothing that might upset or confuse the family audience,” said Martin Kaplan, the Norman Lear professor of entertainment, media and society at the University of Southern California and a former Walt Disney Studios executive. “Fun for all. Nothing objectionable. Let’s all be transformed by the magic wand. But we are so divided today, so revved up, that even Disney is having a hard time bringing us together.”Avoiding socially divisive topics, of course, in itself reflects a certain worldview. The Walt Disney Company’s namesake founder, after all, was an anti-union conservative. Main Street U.S.A. patriotism is on prominent display at Disney’s theme parks. The traditional Christmas story is told each December at Disney World in Florida and Disneyland in California with Candlelight Processional events, Bible verses and all.It took the company until 2009 to introduce a Black princess.But in recent years, there has been a noticeable change. Robert A. Iger, who served as chief executive from 2005 to 2020, pushed the world’s largest entertainment company to emphasize diverse casting and storytelling. As he said at Disney’s 2017 shareholder meeting, referring to inclusion and equality: “We can take those values, which we deem important societally, and actually change people’s behavior — get people to be more accepting of the multiple differences and cultures and races and all other facets of our lives and our people.”In essence, entertainment as advocacy.Mr. Iger was the one who pushed forward the global blockbuster “Black Panther,” which had an almost entirely Black cast and a powerful Afrocentric story line. Under his tenure, Disney refocused the “Star Wars” franchise around female characters. A parade of animated movies (“Moana,” “Coco,” “Raya and the Last Dragon,” “Soul,” “Encanto”) showcased a wide variety of races, cultures and ethnicities.Read More on the Walt Disney CompanyDisney World: Celebrations for the theme park’s 50th anniversary are underway. The company hopes they will help with its pandemic recovery.‘Don’t Say Gay’ Bill: Amid employee walkouts and official statements, Disney has become entangled in a battle over the Florida legislation.Streaming: As it faces pressure to keep its streaming business growing, the company announced a cheaper, ad-supported version of Disney+.A Documentary: A movie directed by the granddaughter of one of the Disney founders offered a harsh portrait of pay inequality at the company.The result, for the most part, has been one hit after another. But a swath of Disney’s audience has pushed back.Robert A. Iger, center, Disney’s chief executive from 2005 to 2020, pushed the company to emphasize diverse casting and storytelling.Gareth Cattermole/Getty Images“Eternals,” a $200 million Disney-Marvel movie, was “review bombed” in the fall because it depicted a gay superhero kissing his husband, with online trolls flooding the Internet Movie Database with hundreds of homophobic one-star reviews. In January, Disney was accused by the actor Peter Dinklage and others of trafficking in stereotypes by moving forward with a live-action “Snow White” movie — until it was revealed that the company planned to replace the seven dwarfs with digitally created “magical creatures,” which, in turn, prompted complaints by others about the “erasure” of people with dwarfism.Disney executives tend to dismiss such incidents as tempests in teapots: trending today, replaced by a new complaint tomorrow. But even moderate online storms can be a distraction inside the company. Meetings are held about how and whether to respond; fretful talent partners must be reassured.As Disney prepared to introduce its streaming service in 2019, it began an extensive review of its film library. As part of the initiative, called Stories Matter, Disney added disclaimers to content that the company determined included “negative depictions or mistreatment of people or cultures.” Examples included episodes of “The Muppet Show” from the 1970s and the 1941 version of “Dumbo.”“These stereotypes were wrong then and are wrong now,” the disclaimers read.The Stories Matter team privately flagged other characters as potentially problematic, with the findings distributed to senior Disney leaders, according to two current Disney executives, who spoke on the condition of anonymity to discuss confidential information. Ursula, the villainous sea witch from “The Little Mermaid” (1989), was one. Her dark color palette (lavender skin, black legs) could be viewed through a racial lens, the Stories Matter team cautioned; she is also a “queer coded” character, with mannerisms inspired in part by those of a real-life drag queen.Tinker Bell was marked for caution because she is “body conscious” and jealous of Peter Pan’s attention, according to the executives, while Captain Hook could expose Disney to accusations of discrimination or prejudice against individuals with disabilities because he is a villain.At least some people inside Disney are concerned that such sensitivities go too far. One of the executives worried that looking at artistic creations through a “politically correct filter” could chill creativity.Disney declined to comment for this article.All of this comes at a perilous time for Disney, which is racing to remake itself as a streaming titan as technology giants like Amazon and Apple move deeper into the entertainment business and traditional cable networks like Disney-owned ESPN slowly wither. Disney is also coping with a disruptive changing of the guard, with Mr. Iger stepping down as executive chairman in December.Mr. Iger occasionally spoke out on hot-button political issues during his time as chief executive. His successor, Bob Chapek, decided (with backing from the Disney board) to avoid weighing in on state political battles. Disney lobbyists would continue to work behind the scenes, however, as they did with the Florida legislation.Bob Chapek, Disney’s chief executive, was met with employee protests and then a right-wing backlash after he avoided publicly weighing in on the new Florida law.Chris Pizzello/Invision, via Associated Press“Our diverse stories are our corporate statements — and they are more powerful than any tweet or lobbying effort,” Mr. Chapek wrote in an email to Disney employees on March 7. “I firmly believe that our ability to tell such stories — and have them received with open eyes, ears and hearts — would be diminished if our company were to become a political football in any debate.”In the case of Florida, the approach backfired, first with employee protests and a walkout and then with a right-wing backlash. The Fox News host Tucker Carlson said Disney had “a sexual agenda for 6-year-olds” and was “creepy as hell.” Tweets with the #boycottDisney hashtag accumulated millions of impressions between March 28 and April 3, according to ListenFirst, an analytics firm.Disney executives have long held the position that boycotts have a minimal impact on the company’s business, if any. Disney is such a behemoth (it generates roughly $70 billion in annual revenue) that avoiding its products is almost impossible.But the same vast reach that makes Disney hard to boycott also makes it an increasingly visible part of the country’s cultural debates. Hardly a month goes by without some kind of dust-up, usually with sexual identity and gender as the prompt.On “Muppet Babies” last summer, Gonzo wore a princess gown to a party, defying Miss Piggy’s request that boys dress as knights.Disney ChannelLast summer, “Muppet Babies,” a Disney Junior series for children ages 3 to 8, gently explored gender identity. Gonzo donned a gown, defying a directive from Miss Piggy “that the girls come as princesses and the boys come as knights.” Out magazine wrote that the episode “just sent a powerful message of love and acceptance to gender-variant kids everywhere!” And a far-right pundit blasted Disney for “pushing the trans agenda” on children, starting an online brush fire.Around the same time, some L.G.B.T.Q. advocates were criticizing Disney over “Loki,” a Disney+ superhero show. In the third episode of “Loki,” the title character briefly acknowledged for the first time onscreen what comic fans had long known: He is bisexual. But the blink-and-you-missed-it handling of the information angered some prominent members of the L.G.B.T.Q. community. “It’s, like, one word,” Russell T. Davies, a British screenwriter (“Queer as Folk”), said during a panel discussion at the time. “It’s a ridiculous, craven, feeble gesture.”The Disney+ show “Loki,” starring Tom Hiddleston, was criticized for the way it handled the title character’s brief acknowledgement that he is bisexual.Marvel/Disney+The fighting will undoubtedly continue: The Disney-Pixar film “Lightyear,” set for release in June, depicts a loving lesbian couple, while “Thor: Love and Thunder,” arriving in July, will showcase a major L.G.B.T.Q. character.Last month, when Disney held its most-recent shareholder meeting, Mr. Chapek was put on the spot by shareholders from the political left and right.One person called Disney to task for contributions to legislators who have championed bills that restrict voting and reproductive rights. Mr. Chapek said that Disney gave money to “both sides of the aisle” and that it was reassessing its donation policies. (He subsequently paused all contributions in Florida.) Another representative for a shareholder advocacy group then took the microphone and noted that “Disney from its very inception has always represented a safe haven for children,” before veering into homophobic and transphobic comments and asking Mr. Chapek to “ditch the politicization and gender ideology.”In response, Mr. Chapek noted the contrasting shareholder concerns. “I think all the participants on today’s call can see how difficult it is to try to thread the needle between the extreme polarization of political viewpoints,” he said.“What we want Disney to be is a place where people can come together,” he continued. “My opinion is that, when someone walks down Main Street and comes in the gates of our parks, they put their differences aside and look at what they have as a shared belief — a shared belief of Disney magic, hopes, dreams and imagination.” More