The senior executive responsible for streaming services at the Walt Disney Co. (NYSE: DIS) is leaving the venerable Mouse House to become chief executive of the trending video platform TikTok.

Kevin Mayer, who was chairman of Direct-to-Consumer and International at Disney, will also be chief operating officer of ByteDance, TikTok’s parent company. He will report directly to Yiming Zhang, ByteDance’s founder and chief executive.

“Kevin’s wealth of experience building successful global businesses makes him an outstanding fit for our mission of inspiring creativity for users globally,” Zhang said. “As one of the world’s most accomplished entertainment executives, Kevin is incredibly well placed to take ByteDance’s portfolio of products to the next level.”

Passed Over for Disney’s Top Job

Mayer, who was seen as the heir apparent to chief executive Bob Iger, was passed over for the top job in February. The board instead chose Bob Chapek, who headed Disney Parks, Experiences and Products.

At ByteDance, Mayer will oversee corporate development, sales, marketing, public affairs, security, moderation and legal. He will lead music, gaming, Helo, emerging businesses for the internet technology company headquartered in Beijing, China.

Mayer said he was thrilled to be joining ByteDance. “I’ve been impressed watching the company build something incredibly rare in TikTok – a creative, positive online global community – and I’m excited to help lead the next phase of ByteDance’s journey as the company continues to expand its breadth of products across every region of the world,” he said.

TikTok’s video platform has gained wide popularity while the pandemic has people in lockdown. Its short video format is ideal for showing what people do to keep themselves entertained when forced to stay home.

TikTok joined with XQ Institute, the LeBron James Family Foundation and the Entertainment Industry Foundation to live stream a graduation event for the Class of 2020. It included a commencement address from former President Barack Obama.

New Stature for Streaming Services

Mayer is leaving Disney just as streaming services have taken on a vital role for the company because of stay-at-home orders. With theme parks shut down, movie production shuttered and cruise ships docked, the premium streaming service Disney+ has posted strong growth as Americans have looked for home entertainment options.

.When Disney+ launched in November, several analysts predicted that the streaming service would have 50 million subscribers by mid-2022. But the subscriber count blew past that mark in early April and totaled 54.5 million by May 4.

Disney+ needs to continue its rapid growth if it is going to challenge its top competitor, Netflix Inc. (NASDAQ: NFLX). The streaming giant has more than 180 million subscribers around the world. The Disney+ monthly subscription fee of $6.99 is about half the price of the most popular Netflix package.

Mayer has also been a major dealmaker for Disney. He orchestrated the acquisitions of Pixar Entertainment, Marvel Studios, Lucasfilm Ltd. and 21st Century Fox.

‘What Happens if Mayer Leaves?’

His role at Disney was so important that the website The Verge asked whether he would stay with the Magic Kingdom after losing out on the top job in February. The Verge noted that Mayer knew the streaming business better than anyone except Iger. With competition heating up in streaming, it said, Disney needed its global rollout to continue to go smoothly.

“But with Iger leaving and Chapek getting the CEO position, there’s growing concern around one big question: what happens if Mayer leaves?” The Verge said.

During Iger’s tenure, Disney was considered to be one of the great blue chip stocks. For over a decade, it regularly outperformed the stock market. Because of its strong bottom line, it was considered one of the safest large-cap stocks for investors to buy over the long term.

Year to date, Disney has underperformed the market. Its shares are down more than 20%, while the S&P 500 is off just over 10%. On Monday, Disney’s stock price rose 7.15% after Moderna Inc. (NASDAQ: MRNA) announced it was seeing progress in early testing stages of a possible vaccine for COVID-19.

Presumably, an effective vaccine for COVID-19 would make it easier for Disney to reopen and operate its theme parks. The park in Shanghai, China, has reopened and demand for tickets was strong, even though all visitors must wear masks. Social distancing is required and no selfies can be taken with Disney characters.

Entrance gates are closed at all the parks in the United States. On Wednesday, the Disney Springs shopping and dining area will reopen in Orlando, Florida. All visitors over the age of 3 will be required to wear masks. The theme parks and hotels will remain closed.

Without a vaccine, some analysts suggest that the theme park business will be depressed for months or years. Moderna cautioned that although the results were promising, they came from a preliminary stage of testing.

“I was happy with my job at Disney,” Mayer told The New York Times in a phone interview. “The magnitude of this opportunity was just something I couldn’t pass up.”

Although ByteDance is based in China, Mayer will work from Los Angeles and make frequent trips to Beijing. Having a senior executive in the United States may add fuel to the rumors that TikTok or ByteDance could do an IPO.

And at least one U.S. senator, Josh Hawley, has said he would like Mayer to testify before Congress about ByteDance and TikTok. U.S. lawmakers have been been seeking testimony from company leaders about the privacy of the TikTok app. But company executives had said they could not testify because they are in China.

On Monday, Hawley tweeted:

.@tiktok_us previously told me they couldn’t attend hearings and testify because executives were located in #China. But this new executive lives in the USA. I look forward to hearing from him. Under oath. https://t.co/XPfiVpo9Ta

— Josh Hawley (@HawleyMO) May 18, 2020

Rebecca Campbell to Succeed Mayer

Disney named Rebecca Campbell to succeed Mayer. Last year, she became president of the Disneyland Resort in Anaheim, California. Before that, she had a senior leadership role at Disney’s Europe, Middle East and Africa operation. She also worked on the launch plan for Disney+.

Mayer said that Campbell had been a critical member of his team and that he was “certain the business is in great hands.”

Disney also named a new chairman for Theme Parks and Consumer Products: Josh D’Amaro, who was president of Walt Disney World in Orlando, Florida.

“I want to thank Bob for giving me this opportunity, and I look forward to following his record of driving innovation, value and growth at Parks,” D’Amaro said.

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