Disney has added a few more million subscribers to Disney + over the past two months, bringing the total to more than 103 million, which executives will have to address today on the company’s revenue call.
As people in the United States begin to leave again, questions about what’s next for Disney may come up. Disney is preparing to release movies in theaters (Cruella, Black Widow) again, with more participants in parks (Disney is open and ready to launch the Avengers campus), and the game is basically back (good news for ESPN). New shows like Vandavision and Falcon and Winter Soldier are catching people’s attention – but are they still fueling subscribers’ growth? Are the raincoats that have been around every Disney field starting to fall asleep, or is it just beginning to tell?
“We are pleased to see encouraging signs of recovery in our businesses and are focused on increasing our operations, while at the same time stimulating the long-term growth of the company,” Disney CEO Bob Chopk said in a statement. This is clearly reflected in the reopening of our theme parks and resorts, the increased productivity in our studios, the continued success of our streaming services and the unparalleled portfolio expansion of the multifaceted game rights deals for ESPN and ESPN +. “
The most magical place on earth
There is no doubt that Disney is facing a tough year. While some of its competitors have been able to lean on the strengths of their parent companies (both WarnerMedia and NBC Universal, subsidiaries AT&T and Comcast, respectively, have seen more broadband and mobile usage than infection), Disney has failed. Parks and Studios, two of the company’s top revenue drivers, were huge hits. Executives pointed to Disney + Rapid growth is a highlight, Although there is no scale, the scaling speed is impressive, and streaming is not yet a super lucrative business.
Everything is coming back to the theme parks. In pre-epidemic times, parks were Disney’s largest Revenue driver. In the third financial quarter of Disney 2020 (ending June 2020), Disney Its parks saw revenue Decreases by 85 percent. Disney reported only $ 983 million in the quarter. By October 2020, as more people began to move to parks (including Disney World in Florida) within a certain capacity, revenue increased slightly. Disney brought in $ 2.5 billion, but it was 61% lower than the previous year, which saw $ 6.66 billion in revenue.
This quarter, Disney sees a return to life. The company recorded 2 3.2 billion in parks revenue. It is still down from the same period last year, but better than in recent quarters.
For Disney executives, an increase is an increase. As vaccine rates Will continue to rise, And with new offers for families and fans to visit the parks (including the Avengers campus), executives are pointing to even stronger revenue growth in the future. It may take some more time for Disney to hit pre-epidemic numbers on its parks as capacity restrictions and public consumer reluctance persist, but as cases drop and vaccination rates rise, parks could once again become a major revenue earner.
Disney does its best to figure out how to add more people to the parks – content. For example, Jungle Cruise is a live-action film starring Twain Johnson and Emily Blunt, based on a theme park ride of the same name. Like Pirates of the Caribbean, part of creating a movie or series based on the theme park ride encourages fans to buy tickets to the park and enjoy the ride.
Content is king
In that note, Disney executives need to answer questions about how they approach theatrical specifics against hybrid releases. Shortly before today’s earnings, Twain Johnson also confirmed that Jungle Cruise Theaters will hit Disney + as a premiere access title (i.e. costing an extra $ 30 per subscriber) the same day. This is the same strategy that Disney used with Mulan, Raya and the Lost Dragon, Cruella and the Black Widow.
Previously, CEO Bob Sapek’s decision to release some images through a hybrid distribution model could be used as another data point in exploring Premier Access with the play on the same date as “What are our titles, do we think we should put something in the service for that particular guest or is it something?” Or, more simply, Disney executives instead of using the “free” image to attract more subscribers to register for movies like Soul, which people think people will pay for at Disney.
What does this mean for big tentball titles like Shank-C and Legend of the Ten Rings? Theatrical business is even more important to Disney; This is very important for Disney in all studios. Disney movies are also very important to theatergoers like AMC 50% off worldwide box office How do executives think about streaming exclusions, hybrids and theatrical films only going forward?
This is especially true when the average revenue per user (ARPU) on the Disney + page is 99 3.99, up from 63 5.63 in the previous year.
This is not all destruction and darkness. Over the past year, Disney has proven that its streaming strategy works. With more and more subscribers being added every quarter, Disney has a strong array of new shows (including many from Marvel and Star Wars) that will hit Disney throughout the year. DSN deals with ESPN + and Hulu customers ‘most attractive deals, bringing FX titles to Hulu and looking forward to more game league licensing opportunities to settle the stalwarts’ preferences.
But if Disney + growth has started slowly, there are questions to be answered. We need to help executives, investors, and fans understand how Disney’s various divisions all come together as life approaches a certain default. We hope that many of these questions will be answered during today’s call.