Even as its Disney+ subscriber tally fell by more than 10 million viewers in the company’s third fiscal quarter completed July 1, on a Wednesday earnings call Disney announced another wave of price increases for access to its streaming channels which also include Hulu and ESPN+.
While the company continues to struggle to move its Disney+ operations into positive territory, other areas of Disney’s sprawling business operations had a brighter second quarter of the year and CEO Bob Iger said he was “incredibly confident in Disney’s long-term trajectory.”
Fiscal performance at Disney’s 12 theme parks was among the highlights of the previous quarter with the company reporting a revenue increase of 13% to $8.3 billion for parks operations. Iger noted Disney’s Asia-based theme parks did particularly well while activity at Orlando’s Walt Disney World was less strong.
Disney reported its overall revenues increased 4% to $22.33 billion in the quarter but, due to one time costs of $2.65 billion related to “content impairments,” posted losses of $460 million for the quarter.
Iger also shouted out Disney’s recently announced deal with casino operator Penn Entertainment that will allow the use of ESPN branding for the company’s sports-betting app. The 10-year, $2 billion deal paves the way for the launch of Penn’s new ESPN Bet app. As of early 2023, 24 states allow online sports betting though Utah is not among them.
Iger addressed rumors that Disney could be looking to sell off ESPN by noting that while the company was seeking out new, strategic partners it intended to retain ownership of the sports brand. ESPN was another Disney holding that came out on the plus side of the Wednesday report, with Iger noting ESPN also saw growth for the quarter.
While Disney+ subscribers dropped from 157.8 million at the end of the company’s second quarter to 146.1 at the end of the recent quarter, the company released news Wednesday detailing price increases for its streaming services. New monthly subscription fees, which go into effect on Oct. 12, include: Disney+, no ads: $13.99, with ads: $7.99; Hulu, no ads: $17.99, with ads: $7.99; ESPN+, with ads: $10.99 and; the “Trio Premium” which includes Disney+ without ads, Hulu without ads and ESPN+ with ads for $24.99 per month.
On Wednesday, Disney reported that Disney+ operations lost $512 million in the most recent quarter but were well down from the $1.06 billion in losses from the same quarter last year. Since its launch in late 2019, Disney+ has reportedly accumulated losses in excess of $10 billion.
Disney’s movie business, which includes the Marvel, LucasFilm and Pixar studios in addition to its namesake productions, has been inconsistent of late even as it leads all competitors this year with $3.4 billion in box office receipts as of early July, according to a report from Deadline. But in a June report, box-office analyst Valliant Renegade estimated that Disney has lost nearly $900 million following its last eight studio releases, including box office flops like Lightyear and Strange World.
Without naming names, Iger acknowledged the poor box-office performance of some of the company’s recent films and noted upcoming strategy changes including paring down the number of films its studios produce and reducing the budgets on those productions.
“The performance of some of our recent films has definitely been disappointing, and we don’t take that lightly,” Iger said on the call. “As you’d expect we’re focused on improving the quality of the films we’ve got coming up. It’s something I’m working closely with the studio on.”
During the call, Iger said the three businesses that will drive Disney’s “growth and value creation” over the next five years will be the company’s movie studios, theme parks and streaming services.
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Disney set to raise streaming prices even as it continues to lose subscribers - Deseret News
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