Disney Reports Loss in Shares, TV Network Profits, Increase in Subscribers
By Movieguide® Contributor
Heads of Disney are remaining optimistic despite a roller coaster of losses and gains this fiscal quarter amid changing audience habits and an increase in travel post-COVID.
“Shares of Disney closed down 9.5% to $105.39 Tuesday in New York, the worst single-day loss since November 2022,” according to Bloomberg. “They had gained 29% this year through Monday.”
Meanwhile, the mega-brand reported a six million-plus increase in subscribers in the second quarter that ended March 30, while still suffering an $18 million loss. That number is a fraction of the company’s loss in streaming income of $659 million last year.
Networks such as the Disney Channel and Disney-owned ABC have seen a drop in $2.77 billion because of a decrease in ad sales and cable subscribers.
“We are pleased with the progress we’re making in streaming, although, as we said before, the path to long-term profitability is not a linear one,” Chief Financial Officer Hugh Johnston said.
“While we are expecting softer Entertainment DTC results in Q3 to be driven by Disney+ Hotstar, we continue to expect our combined streaming businesses to be profitable in the fourth quarter, and to be a meaningful future growth driver for the company, with further improvements in profitability in fiscal 2025,” the company stated per Variety.
As travel has increased back to pre-COVID levels, sales from theme parks have seen an increase with Disneyland Hong Kong, their largest park, seeing the most growth. Disney theme parks brought in $2.29 billion in the second quarter.
“While consumers continue to travel in record numbers and we are still seeing healthy demand, we are seeing some evidence of a global moderation from peak post-COVID travel,” Johnston said.
At the same time, the company took a financial hit with a $2 billion impairment cost as part of a cricket-broadcasting rights deal with India.
The media giant took a hit in the movie department as well, with the SAG-AFTRA and WGA strikes earlier last year, that delayed any releases for the second quarter. Disney lost 18 million in that quarter.
CEO Bob Iger returned to the helm in 2022, and he has been revamping the corporation partly by cutting costs. Iger has also stated that the company would be more focused on entertainment than messages after box office misses such as LIGHTYEAR and STRANGE WORLD which both featured LGBTQ+ characters.
“Creators lost sight of what their No. 1 objective needed to be,” Iger said at the DealBook Summit in New York. “We have to entertain first. It’s not about messages.”
“I like being able to entertain if you can infuse it with positive messages and have a good impact on the world. Fantastic. But that should not be the objective. When I came back, what I have really tried to do is to return to our roots,” he added.
The CEO also said that in order to focus on quality over quantity, Disney will only release two movies from the Marvel franchise per year, as previously reported by Movieguide®:
While most of the public believes the recent flops are a result of “superhero fatigue,” Marvel insiders blame the drop in interest on a shift in the movie industry as a whole. Nonetheless, Disney is clearly hoping that a reduced output will allow fans to catch up with the series and allow time for hype to be generated for upcoming projects.
The change in Disney’s Marvel strategy coincided with a shift in Disney’s content plan as a whole as the company looked to refocus itself on producing original shows and movies alongside preestablished IPs. Iger, however, noted that he continues to believe in the power of sequels, given that they already have an established identity with the public.
“We had gone through a period where our original films in animation were dominating,” Iger said. “We are now swinging back a bit to lean on sequels.”
Disney is releasing INSIDE OUT 2 and TOY STORY 5 this summer, along with DEADPOOL & WOLVERINE and new CAPTAIN AMERICA and AVENGERS movies as well.
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