HOW Much Money Did Disney Make This Year?
A year ago at this time, I wrote the following:
“The results this time left a smile on everyone’s face. In the wake of the Fox acquisition, Disney’s revenue has broken records.”
The title of that article was, “Disney Makes a Lot of Money 2019 Edition.”
A lot can change in a year, my friends. Disney just released its fiscal 2020 earnings report, and the news is…less positive.
Somehow, Disney still pulled off a ton of magic, once again beating all reasonable expectations.
How Much Did Disney Make?
Okay, Disney published two sets of data Thursday afternoon. One of them represents the company’s earnings for the fiscal fourth quarter.
The other one, the more important of the two, shows Disney’s income for fiscal 2020.
I don’t want to bore you with numbers. So, I’ll prioritize the latter while discussing the former’s COVID impact.
For 2019, Disney earned a record-shattering $69.6 billion. Despite everything, the company only declined six percent in 2020.
Disney’s $65.b million 2020 total underscores how much the Fox acquisition has placed the Mouse on the path to long-term greatness.
Revenue did fall 23 percent for the final quarter of 2020, finishing with $14.7 billion.
Obviously, much of the explanation there stems from pandemic-related losses.
As Disney execs noted during the conference call, Disney Cruise Line and Disneyland suffered closures for the entire quarter.
Similarly, other businesses like Adventures by Disney, theatrical releases, and merchandising suffered mightily.
Folks, you don’t have to be a Business major to understand that zero on a spreadsheet hurts the bottom line.
Disney operates several underachieving divisions right now due to the pandemic.
Even so, these numbers show that Disney’s revenue will explode as soon as a mass-produced vaccine arrives. And hope exists that we’ll have one by April!
About the Parks
Disney recently reorganized its core businesses. However, the company provided revenue totals for all four divisions plus additional insights.
For this reason, we know that Parks, Resorts and Experiences feel from $6.7 billion in the fiscal fourth quarter of 2019 to a bit under $2.6 billion in 2020.
For the entire year, the total dropped from $26.2 billion to $16.5 billion. That’s a quarterly fall of 61 percent and an annual one of 37 percent.
None of this should surprise anyone. At one point in 2020, all Disney theme parks closed due to Coronavirus concerns.
Even now, Disneyland Paris and Disneyland remain inoperable due to governmental decisions.
Similarly, the revenue-generating entities like Disney Cruise Line cannot host guests safely yet, although that will hopefully change soon.
Still, Disney’s 61 percent quarterly decline is much better than anyone else in the industry has managed thus far.
For example, Universal Studios just reported an 81 percent drop!
Yes, the situation could have been worse for Disney. But the company’s CFO still suggested that the pandemic has cost the parks $2.4 billion and counting!
About the Other Divisions
We will save the best for the next section. For now, let’s evaluate Disney’s other core businesses.
Studio Entertainment predictably collapsed due to the lack of theatrical releases.
The division managed a paltry $1.6 billion for the quarter, down 52 percent from last year’s $3.3 billion.
Obviously, Disney couldn’t release any new movies. However, its catalog titles and new-to-digital offerings propped up the division.
Overall, Disney’s film division fell from $11.1 billion to $9.6 billion, a tolerable drop of 13 percent.
However, the CFO warned that the next quarter will compare Frozen 2 and Star Wars: The Rise of Skywalker to…nothing. Yeah, ouch.
For three straight earnings reports, we’ve expected the worst from Disney, only for the company to surprise.
Next quarter is apparently when the smoke and mirrors will fall by the wayside, and the situation turns bleak.
One division has kept Disney afloat during the pandemic, and it’s not the one you think. We’re getting to that one.
Instead, I’m referencing Media Networks, Disney’s television empire.
All its cable channels and ABC experienced solid earnings due to the fact that we’re all stuck at home.
Yes, some disruptions occurred, most notably involving sports broadcasts. Those were counterbalanced by special events and election season ratings.
So, Disney actually gained in this segment for the fourth quarter. It increased from 2019’s $6.5 billion to $7.2 billion in this quarter.
Yes, that’s almost precisely half Disney’s revenue for the fourth quarter.
Media Networks enjoyed a substantial 14 percent gain from $24.8 billion to $28.4 billion for the fiscal year.
Everyone worries about the flagging nature of old media. Still, it accounted for 43 percent of Disney’s revenue due to this challenging year.
And that’s why new media is so critical to Disney’s future.
About Disney+
Okay, you’ve likely read the headline by now.
Disney+ destroyed all expectations yet again.
In fact, Disney symbolically held its annual earnings report on a Thursday because that marked the first anniversary of Disney+.
The company revealed that 73.5 million people have signed up for the streaming service, a staggering number for the industry.
Virtually all streaming services begin with modest numbers and then earn subscribers over time.
Netflix reached 70 million subscribers almost precisely five years ago in October of 2015.
Folks, that happened eight years after Netflix introduced its online video service as a free part of DVD membership!
We chronicled this on my podcast a few weeks ago. Netflix gradually won over viewers.
Conversely, Disney+ effectively did in one year that Netflix did in eight.
Disney Already Dominates Streaming
I’m not even sure that was the best news from the earnings report. Disney also stated that Hulu and ESPN+ have combined for 47.1 million subscribers.
That’s more than Peacock and HBO Max combined! Disney’s secondary subscription services are beating the titans from other corporations!
I’ll have more on this in my earnings call recap tomorrow.
However, let’s quickly talk about the numbers.
Direct-to-Consumer & International didn’t exist a year ago.
However, some of the businesses did, and they earned $3.5 billion for the quarter, $9.4 billion for the year.
In 2020, those numbers increased to $4.9 billion and just under $17 billion!
Yes, that’s not a typo. Disney+ already anchors the entire company that much. It earned more than the Parks division!!!
You can understand why Bob Chapek recently evolved Disney into a streaming media company, first and foremost.
Disney+ remains insanely cheap at $6.99 per month.
A year from now, it will likely reach $9.99 or more. At that point, it’ll become Disney’s real breadwinner.
Already, Disney’s streaming media division is responsible for 26 percent of the company’s annual revenue. And it’s just getting started!