Walt Disney (DIS -0.34%) is a company at an inflection point. The return of Bob Iger to head the company brought layoffs and uncertainty over its business strategy, and more changes will likely come soon.

Nonetheless, Disney seems focused on content. This has come at the expense of the growth area that Disney and its shareholders have ignored. Until that part of the company gets more respect, Disney may struggle to prosper.

The problem with focusing on content

Indeed, platforms like Disney+ and ESPN+ have drawn interest. And even as Disney increases prices, customers have largely stayed on its streaming platforms. However, pricing appears to still lag what Disney used to earn from cable subscribers despite the recent price hikes.

Moreover, the company has developed numerous Star Wars and Marvel-themed programs. Still, not all have succeeded commercially, and with frequent program releases, Disney faces the danger of burning out its audiences.

Furthermore, the proliferation of gaming, virtual reality, and other media-oriented options has increased competition. With more choices for where to spend one's leisure time, it has become more difficult to attract more audiences for movie and television programming.

In the first quarter of fiscal 2023 (ended Dec. 31, 2022), segment revenue grew by only 1%. And in fiscal 2022 (ended Oct. 1, 2022), revenue rose by 8%.

The state of theme parks

However, this compares poorly to the Disney parks, experiences, and products segment. That division operates Disney's theme parks, resorts, cruise ships, and consumer products. In Q1, segment revenue grew 21% versus 8% overall for the company. In fiscal 2022, the segment grew by 73% as it emerged from the lockdowns. In comparison, Disney's overall revenue rose 23%.

Although its theme parks add new attractions, in one sense, it remains an area of relative underinvestment. The theme parks remain popular despite a one-day admission price ranging from $109 to $159, clearly outlining that they do not have a demand problem. With the exception of the pandemic lockdowns, the parks, experiences, and products segment has consistently outperformed company averages.

Disney has periodically added theme parks across the world, but the company has not addressed what looks like a shortage of theme parks in the U.S. The original Disneyland in California opened in 1955. It followed up that success with Walt Disney World in Florida in 1971.

However, the U.S. has changed dramatically since 1971. At that time, the U.S. population was 207 million, well below the current 335 million. And major population centers in the Northeast Corridor, Texas, the Midwest, and other areas of the country do not have a Disney theme park nearby.

In comparison, Six Flags Entertainment has 24 U.S. theme parks. Comcast's Universal Studios, Disney's top rival, operates two parks in the U.S., and it just announced plans for a third theme park in Texas. Disney's parks do not account for its underinvestment in the rest of the U.S., and addressing that issue could foster Disney's growth for a long time to come.

Time to change focus

Although content development will always remain important to Disney, it probably needs to emphasize growth in its theme parks.

The company and its investors appear focused on content despite slow growth and the danger of oversaturation. That may come at the expense of the segment tied to theme parks, despite its proven pricing power and higher revenue growth. Given that situation, investors need to ask how long Disney will underinvest in this critical area of growth.