Ultimate Guide to What We Just Learned about Disney
The Walt Disney Company just announced its earnings for its weirdest year ever, 2020.
During the call, the executive team provided transparency about several aspects of the Disney empire.
Photo: Matt Stroshane
Here’s everything we just learned about Disney.
A Success Story for the Ages
CEO Bob Chapek started the earnings call by taking a victory lap for Disney+.
Photo: Disney
To me, this was akin to a closer who got one out taking credit for the starter who pitched the other 8 2/3 innings, as Bob Iger did all the heavy lifting here.
Still, both men and everyone involved with Disney+ deserve huzzahs for what has happened here.
Photo: Disney
Disney+ has gained 73 million subscribers since its debut a year ago on November 12th.
Even the most optimistic forecasts for the service indicated that Disney+ would require five years to reach those levels.
Instead, Disney managed in one year what Netflix needed eight years to achieve.
Remarkably, Disney+ hasn’t even entered several marketplaces yet. It launches in Latin America next week, meaning that it will grow even more soon.
Chapek and his staff repeatedly emphasized an Investor Day on December 10th, wherein the company will reveal more about Disney+.
Image Credit: Disney
So, I’ll see you all back here in a month! Well, we still have some stuff to discuss here, but Disney indicated it’ll save some news until then.
For example, we don’t have any hard numbers regarding Mulan’s popularity on Disney+ yet.
Source: Disney
However, we did learn that Hulu and ESPN+ stand out as unqualified successes. Hulu claims 36.6 million subscribers, while ESPN+ is at 10.3 million.
Disney also has more than 100 series in development across its brands, some of which will head straight to digital to boost Disney+ even more.
Photo: Chesnot/Getty Images
At this point, Disney’s a digital streaming company that happens to operate theme parks and sell merchandise on the side.
Park News
One of the quirks of this fiscal quarter involved the parks. Only one of them, Shanghai Disneyland, operated for all three months.
Everywhere else either opened for part of the time and remained closed entirely.
At the time of the earnings call, Disneyland Paris and Disneyland had both closed due to governmental orders.
Understandably, the parks lost $2.4 billion in potential revenue due to these odds times in which we live.
Still, park news sounded quite positive overall.
Chapek emphasized that Disney’s safety measures have succeeded so much that Walt Disney World has increased capacity limits from 25 to 35 percent.
That’s actually the first time Disney has acknowledged a number, although 25 percent had been the rumored capacity limit all along.
Similarly, Disney has confirmed 77 percent of possible reservations for the current quarter, a strong sign that guests feel comfortable vacationing there.
In fact, Chapek indicated that Thanksgiving week has already approached capacity, no small feat given the United States’ current outbreak.
Perhaps the biggest surprise involved park revenue.
Half of Disney’s parks – Shanghai Disneyland, Hong Kong Disneyland, and Walt Disney World – operated at a profit during the quarter.
In other words, their revenue exceeded their expenses. Chapek had previously stated he didn’t want to run any parks at a loss.
Apparently, Disneyland Paris failed due to its secondary closure, but the other open parks succeeded.
Photo: Disney
In a heartbreaking announcement, Disney revealed that Disneyland will remain closed through the entire fiscal first quarter of 2021.
Thankfully, that sounds worse than it is, as the next quarter ends around New Year’s Day.
We already knew that Disney had canceled hotel reservations during this timeframe. It still hurts to hear, though.
Media News
Chapek sounded pleased with the performance of Disney’s Media Networks and Studio Entertainment divisions, all things considered.
Photo: Marc Piasecki/Getty Images
Obviously, television ratings are up across the board during the pandemic. This led to higher earnings on network television.
Oddly, cable advertising didn’t perform as strongly.
The CEO mentioned that Coronavirus issues led to $500 million in lost earnings potential, meaning that Disney had to leave some money on the table.
Still, the NBA Bubble saved the league and Disney, allowing ESPN and ABC to broadcast live sports.
Photo: @Malika_Andrews Twitter
Even so, ratings across all sports have declined in 2020, save for arguably Major League Baseball.
This drop causes a similar decrease in advertising revenue, one of ESPN’s most lucrative aspects.
Disney also faced expenses for the NBA that it didn’t have in year-over-year comparisons because basketball had already ended by that point in 2019.
The pandemic messes with Disney’s budget in oh so many ways.
Chapek stressed the importance of sports to the media division’s bottom line. He noted that 93 out of the top 100 shows in 2019 featured sports.
For this reason, he expressed regret over the recent cuts at Disney, including the elimination of the entire eSports division, a growth industry.
Photo Credit: Torque Esports
The bottom line dictated this change, as Disney has cause for concern in the coming months.
Until there’s a cure for COVID-19, all the current downward trends will continue, leaving Media Networks and streaming services as the breadwinners.
Photo Credit: 20th Century Fox
The other noteworthy comment about the film division involved the former 20th Century Fox.
From now on, Disney won’t refer to it individually during any kind of earnings reporting.
So, the Disney acquisition of Fox has been completed, and everyone’s done discussing it.
Miscellaneous Updates
We gained some new insights into Disney Cruise Line’s future. Chapek stated that the company faced some high hurdles in setting sail anytime soon.
Image Credit: Disney
The fact that a competitor’s Caribbean cruise has turned into a plague ship won’t help that any.
Still, Disney confirmed that guests have made plans for late 2021 and early 2022, anticipating the pandemic’s end.
Celebrating by taking a cruise sounds like the perfect way to put all this nonsense behind us.
Chapek added that he still expects the Disney Wish in 2022, although the other two ships’ timeline has been pushed back to 2024/2025.
Despite the good news, Disney officials cautioned that the current fiscal quarter will remain grim.
In fact, several signs from the end of 2020 suggest that the next earnings report call will be the most disappointing one of all.
Disney won’t have theatrical releases of note, two parks won’t report income, no cruises or Adventures by Disney will occur, and so on.
Image Credit: Disney
However, good times are just around the corner. Chapek indicated that every film production that COVID-19 delayed has returned to filming.
Even better, eight new projects will start filming by January. Yes, some of them are Marvel Cinematic Universe titles!
Beyond that, Disney chose to hold back some information for the Investor Day coming in less than a month.
So, we’ll do this again in four weeks, hopefully with details about the MCU and Disneyland’s reopening!
Photo: Disney
