I could definitely see a formula where viewership is taking into account but that would not fall on the streamer. The streamer would just pass along the viewership data to WB in this case. I get that Netflix is the big player in streaming and originals residuals could use an update but it feels like a lot of actors are holding grudges towards the wrong party.
DIS Shareholders and Stock Info ONLY
- Thread starter hhisc16
- Start date
TheDailyMoo
DIS Veteran
- Joined
- Jun 9, 2021
I can't remember a single day after earnings where Disney hasn't opened at it's high and faded. Like freakin clockwork. Market blasting off and we can't even fake it for one day. Disney will be celebrating their 200th anniversary before I ever see my cost basis again.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
Some reaction to DIS earnings by several analysts.
https://www.hollywoodreporter.com/b...y-stock-analyst-earnings-reaction-1235559696/
Disney in Transition: Wall Street Divided on When Bob Iger’s Overhaul Ideas Will Pay Off
As the CEO discusses core and non-core assets, several analysts lowered their stock price targets, while others touted their belief in an improving outlook.
August 10, 2023 7:21am PDT
Disney’s latest earnings report and conference call after the market close on Wednesday showed a mix of progress under CEO Bob Iger, including in terms of cost-cutting and moving towards streaming profitability. It also showed challenges, such as in the linear TV networks business, as well as new initiatives, including plans to roll out a Disney+ ad tier abroad and crack down on streaming account sharing, that take pages from the Netflix playbook.
No surprise then that Disney shares in early Thursday trading were little changed, up 1.1 percent at $88.44, as Wall Street had much to digest overnight. First reactions showed that analysts remain divided between bulls and those more cautious until Disney answers open questions or shows further progress.
Several Wall Street experts lowered their stock price targets following the earnings update, while others touted their belief in an improving outlook.
Bank of America analyst Jessica Reif Ehrlich remains a key Disney bull, reiterating her “buy” rating and $135 stock price target in a Thursday report under the title “Strategic transformation in motion,” in which she cited “new areas of optimism.” Among them are management’s forecasts that it would save more than the $5.5 billion in cost cuts that it has targeted and that Disney+ subscriber net additions would accelerate in the current fiscal fourth quarter.
“While several strategic questions remain (e.g. future of linear, film, etc.), we remain confident in Bob Iger’s ability to navigate the company through this transition period,” Reif Ehrlich concluded. “Disney historically has traded at a 20 percent-plus premium to the S&P 500 (on price/earnings) versus the modest discount it is trading at today (on calendar year 2024 earnings estimates). Given the latest guidance as well as cost cutting initiatives, we believe consensus forecasts will likely be biased to the upside. Additional progress toward achieving the company’s broader strategic goals could drive multiple expansion back toward their historical premium levels.”
Other Wall Street experts focused more on the near-term challenges for the Hollywood powerhouse.
MoffettNathanson analyst Michael Nathanson maintained his “outperform” stock rating on Disney, while cutting his price target by $5 to $115 “to reflect our lower estimates.” In a report entitled “As Promised, Bob,” he highlighted: “We do not factor in potential upside from any strategic structural asset changes.”
Among his estimate changes, the expert cut his fiscal year 2024 adjusted earnings per share estimate by 15 cents to $4.65 and his fiscal year 2025 estimate by 30 cents to $5.80 a share.
Outlining the company’s current challenges, Nathanson explained: “The structural headwinds of Disney’s linear business and the aggressive shift into streaming distribution, coupled with post-pandemic headwinds, has collapsed Disney’s profits in their Media and Entertainment Distribution business (DMED). In fiscal year 2018, the year before the acquisition of Fox and the launch of Disney+, DMED generated $9 billion in EBITDA. In fiscal year 2023, we now estimate DMED profitability to be $2.4 billion. At the same time, Disney’s Parks and Experiences Business (DPEP) is generating much higher profits in fiscal year 2023 than it did in fiscal year 2019.” The analyst forecasts $12.3 billion this year, up from $9.6 billion in fiscal 2019.
Nathanson also highlighted the challenges analysts face with valuing Disney’s legacy film and TV studios these days. “Unfortunately, Disney’s disclosure and new business structure make it impossible to benchmark this asset,” he said. “In fiscal year 2018, the year before Disney acquired Fox, Disney’s Filmed Entertainment business did $12.3 billion of revenues and $2.7 billion of EBITDA. Given the move to self-license and the collapse in both theatrical and home video windows, we wonder what profitability looks like today.”
The MoffettNathanson also touched on the issue of possible asset sales or spin-offs that Iger has said his team was exploring. “Given that Disney is in the process of exploring all options when it comes to its future mix of assets, we think there is a clear case to be made that under any scenario Disney’s assets are worth materially more than its current enterprise value,” Nathanson concluded. “Perhaps the easiest way to close that gap would be to create a new company (or “newco”) with Disney’s Parks, Experiences and Products segment combined with Disney+ and the studio IP that fuels these flywheels. This asset would likely trade at a premium valuation given the high moat, iconic assets and strong revenue growth.”
The rest he would put into a separate “oldco, housing Disney’s linear networks, ESPN+, Hulu SVOD, Hulu Live TV and Disney+ Hotstar. “Given peer [stock] multiples at Fox and Warner Bros. Discovery, we have no illusions that the market will be generous in the valuation of these businesses,” Nathanson argued. “Yet, we think that the low current implied value of Disney’s non-park businesses doesn’t require anything heroic for these moves to be accretive.”
Wells Fargo analyst Steven Cahall maintained his “overweight” rating on Disney shares, but reduced his stock price target by $1 to $146 in a report entitled “Adaptation.”
“While it’s hardly an easy road ahead, we sense a new Disney defined by adaptation, including cost cuts, price increases, content shake-ups, portfolio shaping, etc. Everything is on the table, and this could be the turning point,” he pointed out.
Among the planned changes at Disney, he highlighted: “another big price increase on ad-free (domestic Disney+ to $13.99 per month, Hulu $17.99 per month, Duo $19.99 per month), new international Disney+ ad tiers, on-track to exceed $5.5 billion in cost cuts, a password sharing crackdown ahead, a sports betting alliance with Penn to get top dollar, seeking ESPN DTC partnerships, and a willingness to transact non-core/non-ESPN linear nets (excluding content houses).”
In streaming, including bundles, Disney now has 77.5 million unique subscribers in the U.S. and Canada, Cahall wrote, mentioning that this was “on par with Netflix.” The analyst went further with the Netflix comparisons. “We are already bulls on DTC long term given Disney’s scale and margin potential driven by cost cuts and price ups,” he explained. “We think new Disney+ pricing is more consistent with the Netflix average revenue per user (ARPU)/content ratio of about $1 per month for each $1 billion of content value.” Concluded Cahall: “We see the DTC earnings path as the biggest potential value unlock.”
The Wells Fargo expert also took a look ahead, summarizing key investor questions and debates ahead of a planned investor event in September. “It now seems like a lot is on the table and we’d expect the updates to focus on: 1) how to improve content, which Bob Iger referenced on the earnings call and remains critical; 2) outlook for streaming, including when to see cost improvements drive DTC towards break-even in fiscal year 2024; 3) potential portfolio changes, such as selling linear excluding ESPN/ content houses; and 4) key factors ahead of ESPN’s DTC transition.”
CFRA Research analyst Kenneth Leon reiterated his “buy” rating on Disney’s stock after the earnings update, but cut his price target by $22 to $105. “We think Disney holds great value, with distinct assets that may be recognized using strategic realignment and likely spin-offs,” he explained. But he cut his earnings estimates for fiscal years 2023 and 2024, which in turn drove his stock price reduction.
In contrast, Guggenheim analyst Michael Morris maintained his “buy” rating and $125 stock price target on Thursday. “Fiscal third-quarter revenue was largely in line with consensus expectations, with a parks beat largely offsetting media softness,” he summarized his key takeaways from the earnings update. “Cost discipline at DTC drove a segment operating income beat.”
Based on the earnings report and call, Morris lowered his fiscal fourth-quarter segment operating income estimate from $3.3 billion to $2.8 billion and his fiscal fourth-quarter Disney+ core subscriber net additions forecast from 3.5 million to 3.0 million, including 1 million domestic and 2 million international users. The analyst also raised his fiscal year 2024 DTC outlook, saying it will be “benefiting from the price increases.”
But Morris remains bullish, concluding: “Our $125 price target reflects our confidence in the long-term strength and potential for parks growth and the renewed focus on profitable growth at the company’s media and entertainment assets.”
Meanwhile, Macquarie analyst Tim Nollen stuck to his “neutral” rating and $94 price target on Disney, summarizing the latest results this way in his report headline: “So much going on, but not much change to numbers.”
“New news included price increases on Disney+ and new ad tier launches, but nothing concrete on big-picture plans for ESPN or other assets,” the analyst highlighted before explaining why he is staying on the sidelines for now. “We believe in long-term success of streaming services, including ESPN, as well as the studio and parks franchises. But we see too many near-term issues to support a more constructive view.”
TD Cowen‘s Doug Creutz also remains less bullish on Disney, reiterating his “market perform” rating with a $94 stock price target, but highlighting that his estimates and model were “under review” following the earnings update.
He called the latest results “a mixed bag” and expressed concern about “DTC prices going up while content gets reduced.” Wrote Creutz: “We worry that consumers will respond poorly to the move given Disney’s simultaneous decision to cut back on original content, exacerbated by the impact of the Hollywood strikes. Even if the severe price/value shift is accepted by consumers, it’s still not clear if the rate of DTC profitability improvement will more than offset the rate of linear profitability attrition (likely over $2 billion year-over-year in fiscal year 2023).”
Beyond Wall Street, Jamie Lumley, analyst at Third Bridge, also commented on Disney’s latest earnings report and conference call, initially focusing on ESPN. “The sports betting deal with Penn Entertainment marks another major change for ESPN and Disney as a whole,” he highlighted. “As cable audiences continue to shrink, this could be an initiative to drive growth and broaden the revenue base as Disney looks to explore strategic options for this asset.”
He also mentioned that experts expect that ESPN could make a full pivot to streaming in 2024, arguing: “However, Disney will likely want to first resolve the future of Hulu before it makes any other transformational changes.”
Disney’s streaming outlook was, of course, also a key issue for Lumley. “Although the streaming business continues on its march to profitability, there is a long road ahead,” he wrote. “Our experts expect that 2025 is a more realistic timeline to achieve profitability than next year, especially considering factors like the dual strike in Hollywood and relatively weak reception of Disney’s content by audiences.”
https://www.hollywoodreporter.com/b...y-stock-analyst-earnings-reaction-1235559696/
Disney in Transition: Wall Street Divided on When Bob Iger’s Overhaul Ideas Will Pay Off
As the CEO discusses core and non-core assets, several analysts lowered their stock price targets, while others touted their belief in an improving outlook.
August 10, 2023 7:21am PDT
Disney’s latest earnings report and conference call after the market close on Wednesday showed a mix of progress under CEO Bob Iger, including in terms of cost-cutting and moving towards streaming profitability. It also showed challenges, such as in the linear TV networks business, as well as new initiatives, including plans to roll out a Disney+ ad tier abroad and crack down on streaming account sharing, that take pages from the Netflix playbook.
No surprise then that Disney shares in early Thursday trading were little changed, up 1.1 percent at $88.44, as Wall Street had much to digest overnight. First reactions showed that analysts remain divided between bulls and those more cautious until Disney answers open questions or shows further progress.
Several Wall Street experts lowered their stock price targets following the earnings update, while others touted their belief in an improving outlook.
Bank of America analyst Jessica Reif Ehrlich remains a key Disney bull, reiterating her “buy” rating and $135 stock price target in a Thursday report under the title “Strategic transformation in motion,” in which she cited “new areas of optimism.” Among them are management’s forecasts that it would save more than the $5.5 billion in cost cuts that it has targeted and that Disney+ subscriber net additions would accelerate in the current fiscal fourth quarter.
“While several strategic questions remain (e.g. future of linear, film, etc.), we remain confident in Bob Iger’s ability to navigate the company through this transition period,” Reif Ehrlich concluded. “Disney historically has traded at a 20 percent-plus premium to the S&P 500 (on price/earnings) versus the modest discount it is trading at today (on calendar year 2024 earnings estimates). Given the latest guidance as well as cost cutting initiatives, we believe consensus forecasts will likely be biased to the upside. Additional progress toward achieving the company’s broader strategic goals could drive multiple expansion back toward their historical premium levels.”
Other Wall Street experts focused more on the near-term challenges for the Hollywood powerhouse.
MoffettNathanson analyst Michael Nathanson maintained his “outperform” stock rating on Disney, while cutting his price target by $5 to $115 “to reflect our lower estimates.” In a report entitled “As Promised, Bob,” he highlighted: “We do not factor in potential upside from any strategic structural asset changes.”
Among his estimate changes, the expert cut his fiscal year 2024 adjusted earnings per share estimate by 15 cents to $4.65 and his fiscal year 2025 estimate by 30 cents to $5.80 a share.
Outlining the company’s current challenges, Nathanson explained: “The structural headwinds of Disney’s linear business and the aggressive shift into streaming distribution, coupled with post-pandemic headwinds, has collapsed Disney’s profits in their Media and Entertainment Distribution business (DMED). In fiscal year 2018, the year before the acquisition of Fox and the launch of Disney+, DMED generated $9 billion in EBITDA. In fiscal year 2023, we now estimate DMED profitability to be $2.4 billion. At the same time, Disney’s Parks and Experiences Business (DPEP) is generating much higher profits in fiscal year 2023 than it did in fiscal year 2019.” The analyst forecasts $12.3 billion this year, up from $9.6 billion in fiscal 2019.
Nathanson also highlighted the challenges analysts face with valuing Disney’s legacy film and TV studios these days. “Unfortunately, Disney’s disclosure and new business structure make it impossible to benchmark this asset,” he said. “In fiscal year 2018, the year before Disney acquired Fox, Disney’s Filmed Entertainment business did $12.3 billion of revenues and $2.7 billion of EBITDA. Given the move to self-license and the collapse in both theatrical and home video windows, we wonder what profitability looks like today.”
The MoffettNathanson also touched on the issue of possible asset sales or spin-offs that Iger has said his team was exploring. “Given that Disney is in the process of exploring all options when it comes to its future mix of assets, we think there is a clear case to be made that under any scenario Disney’s assets are worth materially more than its current enterprise value,” Nathanson concluded. “Perhaps the easiest way to close that gap would be to create a new company (or “newco”) with Disney’s Parks, Experiences and Products segment combined with Disney+ and the studio IP that fuels these flywheels. This asset would likely trade at a premium valuation given the high moat, iconic assets and strong revenue growth.”
The rest he would put into a separate “oldco, housing Disney’s linear networks, ESPN+, Hulu SVOD, Hulu Live TV and Disney+ Hotstar. “Given peer [stock] multiples at Fox and Warner Bros. Discovery, we have no illusions that the market will be generous in the valuation of these businesses,” Nathanson argued. “Yet, we think that the low current implied value of Disney’s non-park businesses doesn’t require anything heroic for these moves to be accretive.”
Wells Fargo analyst Steven Cahall maintained his “overweight” rating on Disney shares, but reduced his stock price target by $1 to $146 in a report entitled “Adaptation.”
“While it’s hardly an easy road ahead, we sense a new Disney defined by adaptation, including cost cuts, price increases, content shake-ups, portfolio shaping, etc. Everything is on the table, and this could be the turning point,” he pointed out.
Among the planned changes at Disney, he highlighted: “another big price increase on ad-free (domestic Disney+ to $13.99 per month, Hulu $17.99 per month, Duo $19.99 per month), new international Disney+ ad tiers, on-track to exceed $5.5 billion in cost cuts, a password sharing crackdown ahead, a sports betting alliance with Penn to get top dollar, seeking ESPN DTC partnerships, and a willingness to transact non-core/non-ESPN linear nets (excluding content houses).”
In streaming, including bundles, Disney now has 77.5 million unique subscribers in the U.S. and Canada, Cahall wrote, mentioning that this was “on par with Netflix.” The analyst went further with the Netflix comparisons. “We are already bulls on DTC long term given Disney’s scale and margin potential driven by cost cuts and price ups,” he explained. “We think new Disney+ pricing is more consistent with the Netflix average revenue per user (ARPU)/content ratio of about $1 per month for each $1 billion of content value.” Concluded Cahall: “We see the DTC earnings path as the biggest potential value unlock.”
The Wells Fargo expert also took a look ahead, summarizing key investor questions and debates ahead of a planned investor event in September. “It now seems like a lot is on the table and we’d expect the updates to focus on: 1) how to improve content, which Bob Iger referenced on the earnings call and remains critical; 2) outlook for streaming, including when to see cost improvements drive DTC towards break-even in fiscal year 2024; 3) potential portfolio changes, such as selling linear excluding ESPN/ content houses; and 4) key factors ahead of ESPN’s DTC transition.”
CFRA Research analyst Kenneth Leon reiterated his “buy” rating on Disney’s stock after the earnings update, but cut his price target by $22 to $105. “We think Disney holds great value, with distinct assets that may be recognized using strategic realignment and likely spin-offs,” he explained. But he cut his earnings estimates for fiscal years 2023 and 2024, which in turn drove his stock price reduction.
In contrast, Guggenheim analyst Michael Morris maintained his “buy” rating and $125 stock price target on Thursday. “Fiscal third-quarter revenue was largely in line with consensus expectations, with a parks beat largely offsetting media softness,” he summarized his key takeaways from the earnings update. “Cost discipline at DTC drove a segment operating income beat.”
Based on the earnings report and call, Morris lowered his fiscal fourth-quarter segment operating income estimate from $3.3 billion to $2.8 billion and his fiscal fourth-quarter Disney+ core subscriber net additions forecast from 3.5 million to 3.0 million, including 1 million domestic and 2 million international users. The analyst also raised his fiscal year 2024 DTC outlook, saying it will be “benefiting from the price increases.”
But Morris remains bullish, concluding: “Our $125 price target reflects our confidence in the long-term strength and potential for parks growth and the renewed focus on profitable growth at the company’s media and entertainment assets.”
Meanwhile, Macquarie analyst Tim Nollen stuck to his “neutral” rating and $94 price target on Disney, summarizing the latest results this way in his report headline: “So much going on, but not much change to numbers.”
“New news included price increases on Disney+ and new ad tier launches, but nothing concrete on big-picture plans for ESPN or other assets,” the analyst highlighted before explaining why he is staying on the sidelines for now. “We believe in long-term success of streaming services, including ESPN, as well as the studio and parks franchises. But we see too many near-term issues to support a more constructive view.”
TD Cowen‘s Doug Creutz also remains less bullish on Disney, reiterating his “market perform” rating with a $94 stock price target, but highlighting that his estimates and model were “under review” following the earnings update.
He called the latest results “a mixed bag” and expressed concern about “DTC prices going up while content gets reduced.” Wrote Creutz: “We worry that consumers will respond poorly to the move given Disney’s simultaneous decision to cut back on original content, exacerbated by the impact of the Hollywood strikes. Even if the severe price/value shift is accepted by consumers, it’s still not clear if the rate of DTC profitability improvement will more than offset the rate of linear profitability attrition (likely over $2 billion year-over-year in fiscal year 2023).”
Beyond Wall Street, Jamie Lumley, analyst at Third Bridge, also commented on Disney’s latest earnings report and conference call, initially focusing on ESPN. “The sports betting deal with Penn Entertainment marks another major change for ESPN and Disney as a whole,” he highlighted. “As cable audiences continue to shrink, this could be an initiative to drive growth and broaden the revenue base as Disney looks to explore strategic options for this asset.”
He also mentioned that experts expect that ESPN could make a full pivot to streaming in 2024, arguing: “However, Disney will likely want to first resolve the future of Hulu before it makes any other transformational changes.”
Disney’s streaming outlook was, of course, also a key issue for Lumley. “Although the streaming business continues on its march to profitability, there is a long road ahead,” he wrote. “Our experts expect that 2025 is a more realistic timeline to achieve profitability than next year, especially considering factors like the dual strike in Hollywood and relatively weak reception of Disney’s content by audiences.”
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
Yahoo Finance interview with WSJ reporter Robbie Whelan this morning. He asserts that Iger is "anxious" to unload linear tv assets.
https://finance.yahoo.com/quote/DIS?p=DIS
https://finance.yahoo.com/quote/DIS?p=DIS
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://finance.yahoo.com/quote/DIS?p=DIS
The Walt Disney Company (DIS)
91.93+4.44 (+5.07%)
As of 02:27PM EDT. Market open.
The Walt Disney Company (DIS)
91.93+4.44 (+5.07%)
As of 02:27PM EDT. Market open.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://www.cnbc.com/2023/08/10/dis...artners-but-its-not-clear-they-want-espn.html
Disney wants sports leagues as ESPN partners, but it’s not clear sports leagues want ESPN
Published Thu, Aug 10 2023 - 3:25 PM EDT
Alex Sherman@sherman4949
Lillian Rizzo@Lilliannnn
Key Points
What isn’t yet clear is why the leagues would do it.
The National Basketball Association and Major League Baseball have both questioned a partnership with ESPN if Disney’s goal is to mitigate or replace payments to leagues for sports broadcast rights with equity in ESPN, according to people familiar with the talks.
Disney executives and league officials agree that strategic partnership discussions are in the pure “idea” phase and may not amount to anything, said the people, who asked not to be named because the talks are private. Talks have had few specifics, said the people, but may heat up as ESPN attempts to reach a rights renewal deal with the NBA. Disney’s exclusive negotiating window with the NBA ends April 2024.
Disney is considering ways to save cash as it tries to shore up its balance sheet. The media giant’s streaming division continues to lose money — with $512 million lost in its most recent quarter — and the company would like to pay down its $44.5 billion in debt. Disney also likely owes at least $9.2 billion to Comcast for its minority stake in Hulu.
Agreeing to a deal where ESPN trades equity for sports rights could potentially save Disney billions of dollars that it can then use for other strategic ventures. ESPN struck a deal earlier this week with Penn Entertainment, which will provide it with $1.5 billion in cash over the next 10 years.
But the leagues also need cash, especially as the regional sports network business is under threat. Teams pay players in large part from the sports rights fees. ESPN’s bids serve an essential role in how the leagues earn money. The organizations can generate competitive bids for packages of games because ESPN is almost always a potential buyer.
Disney CEO Bob Iger said during Disney’s earnings conference call Wednesday that the company is “not necessarily looking for cash infusion” if partners could provide other assets — such as content — as the company transitions ESPN to a direct-to-consumer business. Sources say Disney is targeting 2025 as a potential launch date for an unbundled-from-cable ESPN streaming service. While ESPN+ exists today, it doesn’t include ESPN’s most valuable live sports such as Monday Night Football and most NBA playoff games.
Disney has informed the leagues that it’s also holding separate talks with strategic investors who can provide distribution benefits, according to people familiar with the matter.
“We’re looking for partners that are going to help ESPN successfully transition to a [direct-to-consumer] model,” Iger said Wednesday. “And that, as I’ve said, can come in the form of either content or distribution and marketing support or both.”
An MLB spokesperson declined to comment. An NBA spokesperson said, “we have a longstanding relationship with Disney and look forward to continuing the discussions around the future of our partnership.”
ESPN spinoff possibilities
Iger reiterated Wednesday that he wants to keep a majority ownership stake in ESPN. Iger told CNBC’s David Faber last month that Disney is “not necessarily” looking at spinning off ESPN.
Still, it’s possible Disney could maintain a majority ownership in ESPN while also spinning it off. That option is “on the table,” according to a person with direct knowledge of Disney’s plans.
A spin off of ESPN would give potential partners clarity on the value of their minority stakes if it trades publicly and separately from Disney. Within Disney, ESPN’s value would be clouded by the larger parent company.
Next quarter, Disney will begin to report ESPN’s finances separately from the rest of the company — another potential precursor to a separation. Former Disney head of strategy Kevin Mayer, who is now advising Iger on the future of ESPN along with former Disney Chief Operating Officer Tom Staggs, has previously championed spinning off ESPN so that the linear business won’t drag down Disney’s growth prospects, CNBC reported last week.
For decades, ESPN has been Disney’s crown jewel, generating billions in profit from lucrative pay-TV subscription fees. ESPN is by far the most valuable cable network, charging nearly $10 per month per household for every U.S. cable subscriber, whether they watch the network or not.
Even as U.S. cable subscribers began cutting the cord, ESPN was able to counteract subscriber revenue losses by boosting the amount of money it receives from the pay TV distributors, such as DirecTV, Dish, Comcast, Charter
and Cox.
Within the past 12 months, that trend reversed itself, according to people familiar with the matter.
Still, ratings having increased this year on ESPN’s linear channel even as cord cutting has accelerated. Advertising revenue increased 10% over last year in the most recent quarter “adjusted for comparability,” Iger said Wednesday, as brands look for live events where commercials can’t be skipped.
“The bundle is decaying and they need to come up with a new revenue model,” former ESPN CEO Steve Bornstein said on CNBC on Wednesday. “It’s an evolutionary process, and I think [ESPN] is going to be incredibly well-positioned. The people involved at ESPN today are probably the best executives I’ve ever come across. [ESPN President] Jimmy Pitaro, Kevin Mayer, Bob Iger and Tom Staggs? They’re going to figure out this problem.”
Disney will have to decide if it’s more strategic to keep ESPN’s positive free cash flow to reinvest in streaming entertainment or if spinning off an asset with declining growth trajectory makes more sense.
Disney wants sports leagues as ESPN partners, but it’s not clear sports leagues want ESPN
Published Thu, Aug 10 2023 - 3:25 PM EDT
Alex Sherman@sherman4949
Lillian Rizzo@Lilliannnn
Key Points
- Representatives of the National Basketball Association and Major League Baseball have questioned the logic of taking a minority stake in ESPN if Disney’s goal is to replace cash payments for league rights with equity, sources said.
- Disney is looking for ways to save cash as streaming losses continue and it prepares to buy out Comcast’s Hulu stake.
- Disney has informed the leagues that it’s also holding separate talks with strategic investors who can provide distribution benefits, according to people familiar with the matter.
What isn’t yet clear is why the leagues would do it.
The National Basketball Association and Major League Baseball have both questioned a partnership with ESPN if Disney’s goal is to mitigate or replace payments to leagues for sports broadcast rights with equity in ESPN, according to people familiar with the talks.
Disney executives and league officials agree that strategic partnership discussions are in the pure “idea” phase and may not amount to anything, said the people, who asked not to be named because the talks are private. Talks have had few specifics, said the people, but may heat up as ESPN attempts to reach a rights renewal deal with the NBA. Disney’s exclusive negotiating window with the NBA ends April 2024.
Disney is considering ways to save cash as it tries to shore up its balance sheet. The media giant’s streaming division continues to lose money — with $512 million lost in its most recent quarter — and the company would like to pay down its $44.5 billion in debt. Disney also likely owes at least $9.2 billion to Comcast for its minority stake in Hulu.
Agreeing to a deal where ESPN trades equity for sports rights could potentially save Disney billions of dollars that it can then use for other strategic ventures. ESPN struck a deal earlier this week with Penn Entertainment, which will provide it with $1.5 billion in cash over the next 10 years.
But the leagues also need cash, especially as the regional sports network business is under threat. Teams pay players in large part from the sports rights fees. ESPN’s bids serve an essential role in how the leagues earn money. The organizations can generate competitive bids for packages of games because ESPN is almost always a potential buyer.
Disney CEO Bob Iger said during Disney’s earnings conference call Wednesday that the company is “not necessarily looking for cash infusion” if partners could provide other assets — such as content — as the company transitions ESPN to a direct-to-consumer business. Sources say Disney is targeting 2025 as a potential launch date for an unbundled-from-cable ESPN streaming service. While ESPN+ exists today, it doesn’t include ESPN’s most valuable live sports such as Monday Night Football and most NBA playoff games.
Disney has informed the leagues that it’s also holding separate talks with strategic investors who can provide distribution benefits, according to people familiar with the matter.
“We’re looking for partners that are going to help ESPN successfully transition to a [direct-to-consumer] model,” Iger said Wednesday. “And that, as I’ve said, can come in the form of either content or distribution and marketing support or both.”
An MLB spokesperson declined to comment. An NBA spokesperson said, “we have a longstanding relationship with Disney and look forward to continuing the discussions around the future of our partnership.”
ESPN spinoff possibilities
Iger reiterated Wednesday that he wants to keep a majority ownership stake in ESPN. Iger told CNBC’s David Faber last month that Disney is “not necessarily” looking at spinning off ESPN.
Still, it’s possible Disney could maintain a majority ownership in ESPN while also spinning it off. That option is “on the table,” according to a person with direct knowledge of Disney’s plans.
A spin off of ESPN would give potential partners clarity on the value of their minority stakes if it trades publicly and separately from Disney. Within Disney, ESPN’s value would be clouded by the larger parent company.
Next quarter, Disney will begin to report ESPN’s finances separately from the rest of the company — another potential precursor to a separation. Former Disney head of strategy Kevin Mayer, who is now advising Iger on the future of ESPN along with former Disney Chief Operating Officer Tom Staggs, has previously championed spinning off ESPN so that the linear business won’t drag down Disney’s growth prospects, CNBC reported last week.
For decades, ESPN has been Disney’s crown jewel, generating billions in profit from lucrative pay-TV subscription fees. ESPN is by far the most valuable cable network, charging nearly $10 per month per household for every U.S. cable subscriber, whether they watch the network or not.
Even as U.S. cable subscribers began cutting the cord, ESPN was able to counteract subscriber revenue losses by boosting the amount of money it receives from the pay TV distributors, such as DirecTV, Dish, Comcast, Charter
and Cox.
Within the past 12 months, that trend reversed itself, according to people familiar with the matter.
Still, ratings having increased this year on ESPN’s linear channel even as cord cutting has accelerated. Advertising revenue increased 10% over last year in the most recent quarter “adjusted for comparability,” Iger said Wednesday, as brands look for live events where commercials can’t be skipped.
“The bundle is decaying and they need to come up with a new revenue model,” former ESPN CEO Steve Bornstein said on CNBC on Wednesday. “It’s an evolutionary process, and I think [ESPN] is going to be incredibly well-positioned. The people involved at ESPN today are probably the best executives I’ve ever come across. [ESPN President] Jimmy Pitaro, Kevin Mayer, Bob Iger and Tom Staggs? They’re going to figure out this problem.”
Disney will have to decide if it’s more strategic to keep ESPN’s positive free cash flow to reinvest in streaming entertainment or if spinning off an asset with declining growth trajectory makes more sense.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://www.msn.com/en-us/travel/ar...ready-wants-you-to-start-spending/ar-AA1f924J
The Halloween Industrial Complex Already Wants You to Start Spending
By Jacob Passy
8/11/2023
Summer vacation is still in full swing across much of the country. That hasn’t stopped Walt Disney World from rolling out the jack-o’-lanterns on Main Street, U.S.A.
The resort is hustling summer off the stage and kicking off its Mickey’s Not-So-Scary Halloween Party seasonal event on Friday. Yes, images of scarecrows and tawny foliage are elbowing into prime beach season. It is the earliest that the Halloween event at the Magic Kingdom, first held in 1995, has started.
There will be Disney characters such as Cruella De Vil and the Seven Dwarfs, special parades and fireworks shows, performances featuring the Sanderson Sisters from the “Hocus Pocus” films and candy galore.
Disney is firing the first, extremely early shot in this year’s theme-park Halloween arms race. Some events, like Disney’s, are more family-oriented. Others at Six Flags and Universal Studios lean into the horror, with actors in gory makeup trolling the grounds. What nearly all of these events of the Halloween industrial complex have in common is that they are growing—in size, popularity, and most notably, duration. The witching hour has turned into the witching months.
“August is the new September,” says Martin Lewison, an associate professor at Farmingdale State College in New York who studies theme parks marketing and strategy.
Ginny Phillips, a mother of three and social-media influencer, will be among those in attendance at the Disney Halloween party on Friday, along with her oldest daughter.
“It is like an end-of-summer bash,” says Phillips, who splits her time between the Nashville area and Central Florida. She predicts her family will do far more summertime trick-or-treating at Disney World in August and September than they will in October in their own neighborhood.
The Halloween creep into August brings challenges, such as how to hack a costume in this summer’s record-breaking heat.
Many people dress up for Disney’s Halloween events. Nicole Rivera, a travel agent with Marvelous Mouse Travels, is attending Disney’s festivities on Tuesday, and has coordinated costumes for her family based on characters from the Disney animated film “Moana.”
Her son will be dressed as the chicken character, Heihei, but will wear a T-shirt and shorts instead of full chicken garb, and Rivera also cut back on the feathers she planned to glue onto his get-up.
“I’m the type to go all out so it was really hard to hold back,” she says.
He won’t be wearing the costume again on Halloween proper, since the family lives in Buffalo, N.Y. “It will be about 40 degrees here and windy,” she says.
Theme parks are taking their cues from a Halloween-addicted society. On social media, fans make “Code Orange” posts when they spot the first Halloween merchandise in the wild in stores and many restaurants have already rolled out pumpkin-flavored menu items weeks before Starbucks starts selling its pumpkin spice lattes.
“I feel like adults are more willing to celebrate the things that they enjoyed as a kid, more so than we’ve seen with past generations,” says Mike Wilton, a marketing professional from Southern California who runs a website called All Hallows Geek.
Universal Destinations and Experiences is developing a year-round interactive attraction in Las Vegas based on its popular Halloween Horror Nights events. In California, the Oogie Boogie Bash event at Disneyland Resort, which occurs over 25 nights in September and October, sold out within the first day. Universal Studios theme parks in California and Florida unleash their Halloween Horror Nights in early September.
The epicenter of spooky shindigs is arguably Southern California, home to more than a half-dozen major theme parks. There, Knott’s Berry Farm, a regional park located near Anaheim, Calif., hosted its first Halloween event 50 years ago and is viewed in the industry as the pioneer of the genre. The first edition of what now is called Knott’s Scary Farm took place over just three nights, with tickets costing $4, or about $27 in 2023 dollars, says Jeff Tucker, a show director at the park. Today, the event occurs over six weeks, with admission starting at around $55 per person.
A preview event for the Knott’s Scary Farm celebration is set for late August. The festivities start in earnest in late September.
Now that Halloween events go for more than a month, theme parks have to find ways to keep things scary for people who visit repeatedly. Haunted mazes lose their bite when you know just where a frightening character might pop out. Gus Krueger, a creative and scenic designer at Knott’s, says his team adds rich back stories and lots of hidden details in their mazes—things that visitors might not fully take in on their first times through. The planning takes all year.
The Halloween Industrial Complex Already Wants You to Start Spending
By Jacob Passy
8/11/2023
Summer vacation is still in full swing across much of the country. That hasn’t stopped Walt Disney World from rolling out the jack-o’-lanterns on Main Street, U.S.A.
The resort is hustling summer off the stage and kicking off its Mickey’s Not-So-Scary Halloween Party seasonal event on Friday. Yes, images of scarecrows and tawny foliage are elbowing into prime beach season. It is the earliest that the Halloween event at the Magic Kingdom, first held in 1995, has started.
There will be Disney characters such as Cruella De Vil and the Seven Dwarfs, special parades and fireworks shows, performances featuring the Sanderson Sisters from the “Hocus Pocus” films and candy galore.
Disney is firing the first, extremely early shot in this year’s theme-park Halloween arms race. Some events, like Disney’s, are more family-oriented. Others at Six Flags and Universal Studios lean into the horror, with actors in gory makeup trolling the grounds. What nearly all of these events of the Halloween industrial complex have in common is that they are growing—in size, popularity, and most notably, duration. The witching hour has turned into the witching months.
“August is the new September,” says Martin Lewison, an associate professor at Farmingdale State College in New York who studies theme parks marketing and strategy.
Ginny Phillips, a mother of three and social-media influencer, will be among those in attendance at the Disney Halloween party on Friday, along with her oldest daughter.
“It is like an end-of-summer bash,” says Phillips, who splits her time between the Nashville area and Central Florida. She predicts her family will do far more summertime trick-or-treating at Disney World in August and September than they will in October in their own neighborhood.
The Halloween creep into August brings challenges, such as how to hack a costume in this summer’s record-breaking heat.
Many people dress up for Disney’s Halloween events. Nicole Rivera, a travel agent with Marvelous Mouse Travels, is attending Disney’s festivities on Tuesday, and has coordinated costumes for her family based on characters from the Disney animated film “Moana.”
Her son will be dressed as the chicken character, Heihei, but will wear a T-shirt and shorts instead of full chicken garb, and Rivera also cut back on the feathers she planned to glue onto his get-up.
“I’m the type to go all out so it was really hard to hold back,” she says.
He won’t be wearing the costume again on Halloween proper, since the family lives in Buffalo, N.Y. “It will be about 40 degrees here and windy,” she says.
Theme parks are taking their cues from a Halloween-addicted society. On social media, fans make “Code Orange” posts when they spot the first Halloween merchandise in the wild in stores and many restaurants have already rolled out pumpkin-flavored menu items weeks before Starbucks starts selling its pumpkin spice lattes.
“I feel like adults are more willing to celebrate the things that they enjoyed as a kid, more so than we’ve seen with past generations,” says Mike Wilton, a marketing professional from Southern California who runs a website called All Hallows Geek.
Universal Destinations and Experiences is developing a year-round interactive attraction in Las Vegas based on its popular Halloween Horror Nights events. In California, the Oogie Boogie Bash event at Disneyland Resort, which occurs over 25 nights in September and October, sold out within the first day. Universal Studios theme parks in California and Florida unleash their Halloween Horror Nights in early September.
The epicenter of spooky shindigs is arguably Southern California, home to more than a half-dozen major theme parks. There, Knott’s Berry Farm, a regional park located near Anaheim, Calif., hosted its first Halloween event 50 years ago and is viewed in the industry as the pioneer of the genre. The first edition of what now is called Knott’s Scary Farm took place over just three nights, with tickets costing $4, or about $27 in 2023 dollars, says Jeff Tucker, a show director at the park. Today, the event occurs over six weeks, with admission starting at around $55 per person.
A preview event for the Knott’s Scary Farm celebration is set for late August. The festivities start in earnest in late September.
Now that Halloween events go for more than a month, theme parks have to find ways to keep things scary for people who visit repeatedly. Haunted mazes lose their bite when you know just where a frightening character might pop out. Gus Krueger, a creative and scenic designer at Knott’s, says his team adds rich back stories and lots of hidden details in their mazes—things that visitors might not fully take in on their first times through. The planning takes all year.
BrianL
Doom Buggy Driver
- Joined
- Jul 24, 2013
Elijah Abrams
Mouseketeer
- Joined
- Feb 6, 2020
https://cordcuttersnews.com/disney-may-shut-down-in-some-countries-as-disney-looks-to-cut-costs/
Luke Bouma
on
August 11, 2023
in
All News, News
During Disney’s earnings call this week, Bob Iger was asked about Disney’s plans for Disney+ international. Here is what Disney+ had to say about this:
This is big news if you live outside of the United States. For some, this will mean less original content, and for others, this will mean they could lose Disney+ altogether.
In the past, Disney would sell rights to its content in different countries. It could be Disney is looking for ways to become more profitable by selling its shows to larger streaming services in unprofitable areas. Cutting back on original content for other countries could also help it reduce its losses but still offer the service.
This all comes as Disney is losing money on streaming. This week Disney reported that its direct-to-consumer business posted an operating loss of $512 million, an improvement over the $1.06 billion it lost a year ago in the fiscal third quarter. Disney has said it hopes to make Disney+ profitable soon. Reports have suggested that Disney+ would be profitable in 2024 or 2025. Though Bob Iger has said, he is working hard to make Disney+ profitable as soon as possible.
At this time, Disney has not said what countries it is considering shutting down or cutting back in.
Disney+ May Shut Down In Some Countries As Disney Looks to Cut Costs
ByLuke Bouma
on
August 11, 2023
in
All News, News
During Disney’s earnings call this week, Bob Iger was asked about Disney’s plans for Disney+ international. Here is what Disney+ had to say about this:
You can read the full transcript HERE.
This is big news if you live outside of the United States. For some, this will mean less original content, and for others, this will mean they could lose Disney+ altogether.
In the past, Disney would sell rights to its content in different countries. It could be Disney is looking for ways to become more profitable by selling its shows to larger streaming services in unprofitable areas. Cutting back on original content for other countries could also help it reduce its losses but still offer the service.
This all comes as Disney is losing money on streaming. This week Disney reported that its direct-to-consumer business posted an operating loss of $512 million, an improvement over the $1.06 billion it lost a year ago in the fiscal third quarter. Disney has said it hopes to make Disney+ profitable soon. Reports have suggested that Disney+ would be profitable in 2024 or 2025. Though Bob Iger has said, he is working hard to make Disney+ profitable as soon as possible.
At this time, Disney has not said what countries it is considering shutting down or cutting back in.
Disney Bobby
DIS Veteran
- Joined
- Jun 18, 2019
How was the highlighted comment NOT the strategy from the start? Sound like poor leadership that preferred to just blow money likes drunken sailors instead of doing their homework.
Elijah Abrams
Mouseketeer
- Joined
- Feb 6, 2020
I tried to de-bold the highlighted part, but it was refusing to.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://www.ft.com/content/02e7e67d...traffic/partner/feed_headline/us_yahoo/auddev
Hollywood calls time on golden era of cheap streaming
Top studios turn screws on customers with price rises that rival expensive cable TV bundles
Anna Nicolaou in New York and Christopher Grimes in Los Angeles
8/11/23
The era of cheap streaming is ending, as Hollywood’s largest studios turn the screws on customers with price rises that rival the expensive cable television “bundle” consumers began ditching for Netflix 15 years ago.
A basket of the top US streaming services will cost $87 this autumn, compared with $73 a year ago, as Disney, Paramount, Warner Bros Discovery and others have raised their prices in response to pressure from Wall Street to end the profligacy of the streaming boom. The average cable TV package costs $83 a month.Americans had in recent years enjoyed the benefits of an extravagant era in Hollywood, during which media companies inundated audiences with more programming than ever at a fraction of the cost of traditional television.
Enticed by low prices, consumers rapidly cut the cable “cord” in favour of streaming services, with Disney+ attracting more than 100mn subscribers in only 16 months with a $6.99 subscription.
But privately, media executives warned of a looming “car crash” as they splashed out tens of billions of dollars on TV shows and films.
As interest rates have soared over the past year and a half, the crash has arrived. Media stocks have suffered a bruising correction as Wall Street grew impatient with the heavy streaming losses.
After watching their stock valuations more than halve, Warner Bros and Disney have shifted towards austerity, laying off thousands of staff and raising their subscription prices to curb billion-dollar streaming losses. Even Netflix ditched its basic $9.99 advertisement-free monthly subscription earlier this year, with new customers paying $15.49.“
From a business point of view, streaming was going to have to move in this way — the price point was going to have to go up,” said David Rogers, a Columbia Business School professor and author of The Digital Transformation Roadmap.
“This was accelerated by the fact that we no longer have cheap debt to flood the market with streaming content.”Disney’s latest price increases mark the second time it has raised subscription fees in less than a year, with the monthly cost of its ad-free service rising by $3 to $13.99 from October. Its Hulu service will also increase the price of its ad-free subscription by $3 to $17.99, but the two services are offered as a package for $19.99 a month.
There are cheaper streaming options, of course, but those come with another unloved feature of old-school TV: advertising. “We’re very optimistic about the long-term advertising potential of this business, even amid a challenging ad market,” said Bob Iger, Disney chief executive, this week.
He noted that the company had signed up 3.3mn subscribers to the ad-supported version of Disney+, which costs $7.99.Iger also said that Disney would begin cracking down on password sharing — another move first taken by Netflix, which has successfully converted many freeloaders into paying customers this year.Some analysts questioned whether the price increases will slow, or even reverse, Disney’s subscriber growth — especially at a time when Iger is also planning to cut budgets for streaming shows and movies.
“Does cutting back on content and raising prices work?” said Rich Greenfield, an analyst at LightShed Partners. “Can you raise prices another 30-plus per cent, reduce content spending and continue to grow subscriptions or maintain subscriptions?”
Rogers said there were ways to encourage subscribers to keep paying. “At a certain point you’ve got to watch out for people unsubscribing,” he said. “But [streamers] also have mechanisms for that — they can give a discount if you buy for a year rather than pay month to month.”
As a historic Hollywood labour strike continues, these entertainment giants also risk running out of new shows at the same time that they are wringing consumers for more cash.“[Disney] is asking more and more of the customer . . . while the amount of new content on offer will likely decline,” said analysts at media consultancy Enders, who warned of “a negative spiral and real consequences” if the strike drags on.“Lack of fresh content, particularly for Disney+, will increase churn,” they added.
Hollywood calls time on golden era of cheap streaming
Top studios turn screws on customers with price rises that rival expensive cable TV bundles
Anna Nicolaou in New York and Christopher Grimes in Los Angeles
8/11/23
The era of cheap streaming is ending, as Hollywood’s largest studios turn the screws on customers with price rises that rival the expensive cable television “bundle” consumers began ditching for Netflix 15 years ago.
A basket of the top US streaming services will cost $87 this autumn, compared with $73 a year ago, as Disney, Paramount, Warner Bros Discovery and others have raised their prices in response to pressure from Wall Street to end the profligacy of the streaming boom. The average cable TV package costs $83 a month.Americans had in recent years enjoyed the benefits of an extravagant era in Hollywood, during which media companies inundated audiences with more programming than ever at a fraction of the cost of traditional television.
Enticed by low prices, consumers rapidly cut the cable “cord” in favour of streaming services, with Disney+ attracting more than 100mn subscribers in only 16 months with a $6.99 subscription.
But privately, media executives warned of a looming “car crash” as they splashed out tens of billions of dollars on TV shows and films.
As interest rates have soared over the past year and a half, the crash has arrived. Media stocks have suffered a bruising correction as Wall Street grew impatient with the heavy streaming losses.
After watching their stock valuations more than halve, Warner Bros and Disney have shifted towards austerity, laying off thousands of staff and raising their subscription prices to curb billion-dollar streaming losses. Even Netflix ditched its basic $9.99 advertisement-free monthly subscription earlier this year, with new customers paying $15.49.“
From a business point of view, streaming was going to have to move in this way — the price point was going to have to go up,” said David Rogers, a Columbia Business School professor and author of The Digital Transformation Roadmap.
“This was accelerated by the fact that we no longer have cheap debt to flood the market with streaming content.”Disney’s latest price increases mark the second time it has raised subscription fees in less than a year, with the monthly cost of its ad-free service rising by $3 to $13.99 from October. Its Hulu service will also increase the price of its ad-free subscription by $3 to $17.99, but the two services are offered as a package for $19.99 a month.
There are cheaper streaming options, of course, but those come with another unloved feature of old-school TV: advertising. “We’re very optimistic about the long-term advertising potential of this business, even amid a challenging ad market,” said Bob Iger, Disney chief executive, this week.
He noted that the company had signed up 3.3mn subscribers to the ad-supported version of Disney+, which costs $7.99.Iger also said that Disney would begin cracking down on password sharing — another move first taken by Netflix, which has successfully converted many freeloaders into paying customers this year.Some analysts questioned whether the price increases will slow, or even reverse, Disney’s subscriber growth — especially at a time when Iger is also planning to cut budgets for streaming shows and movies.
“Does cutting back on content and raising prices work?” said Rich Greenfield, an analyst at LightShed Partners. “Can you raise prices another 30-plus per cent, reduce content spending and continue to grow subscriptions or maintain subscriptions?”
Rogers said there were ways to encourage subscribers to keep paying. “At a certain point you’ve got to watch out for people unsubscribing,” he said. “But [streamers] also have mechanisms for that — they can give a discount if you buy for a year rather than pay month to month.”
As a historic Hollywood labour strike continues, these entertainment giants also risk running out of new shows at the same time that they are wringing consumers for more cash.“[Disney] is asking more and more of the customer . . . while the amount of new content on offer will likely decline,” said analysts at media consultancy Enders, who warned of “a negative spiral and real consequences” if the strike drags on.“Lack of fresh content, particularly for Disney+, will increase churn,” they added.
Disney Bobby
DIS Veteran
- Joined
- Jun 18, 2019
I'm talking about this quote:
"We actually have been looking at multiple markets around the world with an eye toward prioritizing those that are going to help us turn this business into a profitable business. What that basically means is there are some markets that we will invest less in local programming but still maintain the service. There are some markets that we may not have a service at all. And there are others that we’ll consider, I’ll call it, high-potential markets where we’ll invest nicely for local programming, marketing and basically full-service content in those markets.
Basically, what I’m saying is not all markets are created equal. And in terms of our march to profitability, one of the ways we believe we’re going to do that is by creating priorities internationally."
How was that NOT part of the strategy from the start? Seems like an accidental admission that they just threw money at streaming and waited to see what was going to stick.
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Just found this and really enjoying the thoughtful conversation here. I'm really on the fence about Disney stock. The media side is hard to value - generally I'm bearish there because it seems like the big tech companies that can use filmed entertainment as a loss leader of sorts have a huge structural advantage moving forward. Add to that considerable debt loads, linear collapsing, and uncertainty about how profitable streaming can eventually be and it looks tough for a lot of players.
On the other hand, Netflix has proven that with enough scale you can make a very profitable business out of it - and Disney is one of the two legacy companies I think have a chance to achieve that scale (DIS and WBD). In fact, Disney is already pretty close with just over $5B DTC revenue quarterly vs $8B+ for Netflix. Of course Disney has to write a big check still for Hulu and WBD is limited by the need to deleverage so it is just hard to peg what the ultimate value will be.
Think I'll stay right here on the fence and watch it play out as a spectator!
On the other hand, Netflix has proven that with enough scale you can make a very profitable business out of it - and Disney is one of the two legacy companies I think have a chance to achieve that scale (DIS and WBD). In fact, Disney is already pretty close with just over $5B DTC revenue quarterly vs $8B+ for Netflix. Of course Disney has to write a big check still for Hulu and WBD is limited by the need to deleverage so it is just hard to peg what the ultimate value will be.
Think I'll stay right here on the fence and watch it play out as a spectator!
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This is absolutely true - although I would suggest they were right to enter streaming but got the strategy wrong. They could have built a decent base of subscribers just with their catalog and without overspending as they have. That's how Netflix did it - build a base and then gradually add more and more content in line with the incoming cash flow. However, with the late start vs Netflix everyone wanted to chase growth at all costs.
If you look back at Netflix they never really did lose that much money - they had a careful strategy to match spending with revenue and keep operating income close to zero during their growth phase. In some ways that strategy also allowed them to sneak up on the big players in the industry. Their 2014 revenue was just under $5B, by 2017 it was just under $12B and 2023 they'll likely hit $35B. Until recently they just kept plowing most of the incoming cash into more content, and by the time the legacy players understood what was happening to them it was too late.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://variety.com/2023/film/news/barbie-filmgoers-hadnt-been-theaters-since-pandemic-1235694530/
Aug 11, 2023 3:56pm PDT
By Pat Saperstein
Nearly a Quarter of ‘Barbie’ Filmgoers in the U.S. Hadn’t Been to a Theater Since Before Pandemic, Survey Finds
“Barbie” brought sporadic moviegoers back to theaters in a big way, a new survey from film tracking service The Quorum found. Quorum surveyed 1,800 “Barbie” ticket buyers in the U.S. over the past three weeks, finding that 11% “couldn’t remember the last film they had seen in a theater.” Another 11% said “Barbie” was the first film they had seen in a theater since the pandemic started in 2020.
That means that 22%, or close to a quarter of moviegoers surveyed, most likely had skipped “Avatar: The Way of Water” and “Top Gun: Maverick,” among other popular post-pandemic theatrical releases, but were enticed by buzz and marketing blitz of the pink phenomenon.
The Quorum, which provides surveys on prospective filmgoers’ interest in upcoming films, estimated that 22% of total ticketbuyers would total around 9 million people who set foot in a multiplex for “Barbie,” and “Barbie” only.
Meanwhile, a healthy 46% of respondents said they go to the movies “all the time,” while 32% go “every now and again.”
The experience also reminded filmgoers that they like going to movies, Quorum said. Among the ticketbuyers surveyed, 40% said the experience reminded them how much they love going to the movies, and that they would go more often. However, a larger percentage, at 45%, said they would like to go more often, but cost is an issue. That group said it would take another movie “as exciting as ‘Barbie’ to get them to return to a theater.
Just 15% said “I don’t think seeing ‘Barbie’ means I will start seeing more movies in a theater. This was a one-off experience.”
Unfortunately, Quorum noted, there are few highly-anticipated wide releases coming to theaters in the next few months, despite the seeming hunger among moviegoers.
The only wide studio release in October, for example, is “The Exorcist: Believer,” on Oct. 13, and there are no wide releases at all set for the Oct. 6 weekend.
Aug 11, 2023 3:56pm PDT
By Pat Saperstein
Nearly a Quarter of ‘Barbie’ Filmgoers in the U.S. Hadn’t Been to a Theater Since Before Pandemic, Survey Finds
“Barbie” brought sporadic moviegoers back to theaters in a big way, a new survey from film tracking service The Quorum found. Quorum surveyed 1,800 “Barbie” ticket buyers in the U.S. over the past three weeks, finding that 11% “couldn’t remember the last film they had seen in a theater.” Another 11% said “Barbie” was the first film they had seen in a theater since the pandemic started in 2020.
That means that 22%, or close to a quarter of moviegoers surveyed, most likely had skipped “Avatar: The Way of Water” and “Top Gun: Maverick,” among other popular post-pandemic theatrical releases, but were enticed by buzz and marketing blitz of the pink phenomenon.
The Quorum, which provides surveys on prospective filmgoers’ interest in upcoming films, estimated that 22% of total ticketbuyers would total around 9 million people who set foot in a multiplex for “Barbie,” and “Barbie” only.
Meanwhile, a healthy 46% of respondents said they go to the movies “all the time,” while 32% go “every now and again.”
The experience also reminded filmgoers that they like going to movies, Quorum said. Among the ticketbuyers surveyed, 40% said the experience reminded them how much they love going to the movies, and that they would go more often. However, a larger percentage, at 45%, said they would like to go more often, but cost is an issue. That group said it would take another movie “as exciting as ‘Barbie’ to get them to return to a theater.
Just 15% said “I don’t think seeing ‘Barbie’ means I will start seeing more movies in a theater. This was a one-off experience.”
Unfortunately, Quorum noted, there are few highly-anticipated wide releases coming to theaters in the next few months, despite the seeming hunger among moviegoers.
The only wide studio release in October, for example, is “The Exorcist: Believer,” on Oct. 13, and there are no wide releases at all set for the Oct. 6 weekend.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
Not a whole lot new here, mostly rehash.
https://finance.yahoo.com/news/disneys-future-hot-topic-among-100421410.html
Dawn Chmielewski
Mon, August 14, 2023 at 5:04 AM CDT
By Dawn Chmielewski
(Reuters) - Hollywood's favorite parlor game of the week: What will Bob Iger do next?
From Culver City to New York City, the U.S. media and entertainment industry's powerbrokers are spinning scenarios about the future and the possible breakup of the industry's most powerful conglomerate.
Walt Disney chief executive Iger, who returned to the company in November for a second stint, triggered the vigorous industry chatter in mid-July when he suggested during a CNBC interview that the company's television businesses, including its stations and cable channels, "may not be core to Disney."
His remarks spurred a frenzy of activity among bankers and private equity players, who began evaluating whether they should "make a move," one banker, speaking on condition of anonymity, told Reuters.
"He's signaling to investors," said the banker. "It starts people thinking."
Iger fueled the conjecture last week during Disney's third-quarter earnings call with investors, when he said the company is mulling strategic partnerships for its marquee sports brand, ESPN, and has received "notable interest," though Disney planned to retain control.
The three businesses that will drive the greatest growth over the next five years, he said, are the company's film studios, theme parks and streaming video.
One top media executive envisioned Iger spinning off the ABC broadcast network, local TV stations and Disney's cable networks such as Disney Channel or FX as a separate company, loading it with an appropriate level of debt.
Another veteran media executive predicted Disney would spin off the television asset to its shareholders as a separate, publicly traded company by 2024, with private equity potentially playing a role.
A fourth media executive who has run traditional and digital media companies said Disney may need to attract outside investors in ESPN so that it can competitively bid for increasingly expensive sports media rights, such as for NBA games, which expire after the 2024-25 season.
That would potentially free up cash for Disney to acquire NBCUniversal's stake in Hulu, assuming full ownership of the streaming service next year. Under an agreement reached in 2019, NBCU parent Comcast can require Disney to buy the Hulu stake, or Disney can require NBCUniversal to sell it, as early as January 2024, at a market value of at least $5.8 billion.
Disney declined to comment.
THE 'FULL BEWKES'
The fourth executive, along with other senior media figures who spoke with Reuters, said Iger is likely crafting options, retaining ownership of ESPN, with the opportunity to shed it in the future to position Disney as a more attractive acquisition target.
The executive likened the strategy to one executed by former Time Warner CEO Jeff Bewkes, who sold off parts of the media conglomerate's business before selling its core film and television unit to AT&T in an $85.4 billion deal that closed in 2018, said the veteran executive.
"You sell the parts, then sell what's left," said the veteran. "That's the full-Bewkes."
That may well be Iger's end-game, these executives speculated. To make it attractive for the only likely buyers big enough to digest a Disney - Apple or Alphabet's Google - Iger would need to prune Disney down to just the parts that preserve its global intellectual property portfolio, while separating out its cash-generating legacy businesses like TV.
"There's no way a FAANG company is going to buy his company when he has all these cable channels, a broadcast network and a cable sports network," said the executive, using an acronym for the five major U.S. technology companies, Facebook (now Meta), Apple, Amazon, Netflix and Google. "It's not the business they're in, and it's unlikely the government would ever allow it."
Amazon, fresh off its $8.5 billion acquisition of MGM last year, would not likely be interested in such a deal, said one source familiar with the matter. And Facebook is not viewed as interested in traditional media assets.
Needham and Co analyst Laura Martin floated the investor appeal of Apple acquiring Disney, writing in March that the combination of great content and strong distribution would create value. This idea continues to circulate in Hollywood.
"Obviously, anyone who wants to speculate about these things would have to immediately consider the global regulatory environment," Iger said, when asked about the possibility during the investor call. "I'll say no more than that. It's just - it's not something that we obsess about."
In that, he may be alone.
https://finance.yahoo.com/news/disneys-future-hot-topic-among-100421410.html
Dawn Chmielewski
Mon, August 14, 2023 at 5:04 AM CDT
By Dawn Chmielewski
(Reuters) - Hollywood's favorite parlor game of the week: What will Bob Iger do next?
From Culver City to New York City, the U.S. media and entertainment industry's powerbrokers are spinning scenarios about the future and the possible breakup of the industry's most powerful conglomerate.
Walt Disney chief executive Iger, who returned to the company in November for a second stint, triggered the vigorous industry chatter in mid-July when he suggested during a CNBC interview that the company's television businesses, including its stations and cable channels, "may not be core to Disney."
His remarks spurred a frenzy of activity among bankers and private equity players, who began evaluating whether they should "make a move," one banker, speaking on condition of anonymity, told Reuters.
"He's signaling to investors," said the banker. "It starts people thinking."
Iger fueled the conjecture last week during Disney's third-quarter earnings call with investors, when he said the company is mulling strategic partnerships for its marquee sports brand, ESPN, and has received "notable interest," though Disney planned to retain control.
The three businesses that will drive the greatest growth over the next five years, he said, are the company's film studios, theme parks and streaming video.
One top media executive envisioned Iger spinning off the ABC broadcast network, local TV stations and Disney's cable networks such as Disney Channel or FX as a separate company, loading it with an appropriate level of debt.
Another veteran media executive predicted Disney would spin off the television asset to its shareholders as a separate, publicly traded company by 2024, with private equity potentially playing a role.
A fourth media executive who has run traditional and digital media companies said Disney may need to attract outside investors in ESPN so that it can competitively bid for increasingly expensive sports media rights, such as for NBA games, which expire after the 2024-25 season.
That would potentially free up cash for Disney to acquire NBCUniversal's stake in Hulu, assuming full ownership of the streaming service next year. Under an agreement reached in 2019, NBCU parent Comcast can require Disney to buy the Hulu stake, or Disney can require NBCUniversal to sell it, as early as January 2024, at a market value of at least $5.8 billion.
Disney declined to comment.
THE 'FULL BEWKES'
The fourth executive, along with other senior media figures who spoke with Reuters, said Iger is likely crafting options, retaining ownership of ESPN, with the opportunity to shed it in the future to position Disney as a more attractive acquisition target.
The executive likened the strategy to one executed by former Time Warner CEO Jeff Bewkes, who sold off parts of the media conglomerate's business before selling its core film and television unit to AT&T in an $85.4 billion deal that closed in 2018, said the veteran executive.
"You sell the parts, then sell what's left," said the veteran. "That's the full-Bewkes."
That may well be Iger's end-game, these executives speculated. To make it attractive for the only likely buyers big enough to digest a Disney - Apple or Alphabet's Google - Iger would need to prune Disney down to just the parts that preserve its global intellectual property portfolio, while separating out its cash-generating legacy businesses like TV.
"There's no way a FAANG company is going to buy his company when he has all these cable channels, a broadcast network and a cable sports network," said the executive, using an acronym for the five major U.S. technology companies, Facebook (now Meta), Apple, Amazon, Netflix and Google. "It's not the business they're in, and it's unlikely the government would ever allow it."
Amazon, fresh off its $8.5 billion acquisition of MGM last year, would not likely be interested in such a deal, said one source familiar with the matter. And Facebook is not viewed as interested in traditional media assets.
Needham and Co analyst Laura Martin floated the investor appeal of Apple acquiring Disney, writing in March that the combination of great content and strong distribution would create value. This idea continues to circulate in Hollywood.
"Obviously, anyone who wants to speculate about these things would have to immediately consider the global regulatory environment," Iger said, when asked about the possibility during the investor call. "I'll say no more than that. It's just - it's not something that we obsess about."
In that, he may be alone.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
Streaming Prices Are Up Nearly 25% in a Year. That’s Part of the Plan.
Price push by Disney, others is part of effort to trim losses, steer users toward more-lucrative ad-supported plans
By Robbie Whelan, Joe Flint and Nate Rattner
Updated Aug. 15, 2023 9:14 am ET
https://www.thecoli.com/threads/str...ffort-to-trim-losses-steer-users-towa.991096/
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://www.hollywoodreporter.com/t...ws-july-2023-tv-platform-rankings-1235566545/
Linear TV Falls Below 50 Percent of Viewing for First Time
Nielsen's monthly platform rankings show broadcast and cable making up less than half of all TV use.
By Rick Porter
August 15, 2023 5:00am
Broadcast and cable networks made up less than half of all TV use in July — the first time linear TV viewing has fallen below 50 percent in Nielsen’s two-plus years of tracking viewing time by platform.
While overall TV use in July edged up from the previous month, the growth came in streaming — which hit an all-time high of 38.7 percent of all TV usage — and the “other use” category, which includes video games played on a TV screen and physical media playback, among other things. That made up 11.6 percent of usage.
Streaming was up from 37.7 percent of TV viewing in June, marking its third consecutive month of an increased share of viewers’ time. July was also the third straight month that streaming’s share of TV use hit a high.
As for linear TV, broadcast networks fell to just 20 percent of viewing in July (vs. 20.8 percent in June). Cable came in at 29.6 percent, down from 30.6 percent the previous month. For both, it was a low point since Nielsen began releasing its monthly platform rankings, which it calls the Gauge, in June 2021. In those first monthly rankings, broadcast and cable accounted for 63.6 percent of all TV use in the United States, whereas now it’s at 49.6 percent.
Streaming, meanwhile, has grown from about a 26 percent share of viewing in June 2021 to 38.7 percent in July — a 48 percent jump.
Among individual streamers, YouTube (not including its YouTube TV service) led the way as usual with 9.2 percent of all TV use, followed by Netflix at 8.5 percent. Fox’s AVOD service Tubi had its best month to date with 1.4 percent of all use, tied with Max.
Acquired series led the streaming bump in July, with Suits on Netflix and Peacock accounting for more than 18 billion minutes of viewing during the month — about the same amount of viewing time as Stranger Things had in July 2022. Disney+’s Bluey had about 5 billion minutes of viewing for the month.
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Nielsen’s Gauge rankings for July 2023 are below.
Platforms:
Streaming: 38.7 percent of TV usage
Cable: 29.6 percent
Broadcast: 20 percent
Other: 11.6 percent
Streaming Services:
YouTube: 9.2 percent of total TV usage
Netflix: 8.5 percent
Hulu: 3.6 percent
Prime Video: 3.4 percent
Disney+: 2 percent
Max: 1.4 percent
Tubi: 1.4 percent
Peacock: 1.1 percent
Roku Channel: 1.1 percent
Paramount+: 1 percent
Pluto TV: 0.9 percent
All others: 5.1 percent
Linear TV Falls Below 50 Percent of Viewing for First Time
Nielsen's monthly platform rankings show broadcast and cable making up less than half of all TV use.
By Rick Porter
August 15, 2023 5:00am
Broadcast and cable networks made up less than half of all TV use in July — the first time linear TV viewing has fallen below 50 percent in Nielsen’s two-plus years of tracking viewing time by platform.
While overall TV use in July edged up from the previous month, the growth came in streaming — which hit an all-time high of 38.7 percent of all TV usage — and the “other use” category, which includes video games played on a TV screen and physical media playback, among other things. That made up 11.6 percent of usage.
Streaming was up from 37.7 percent of TV viewing in June, marking its third consecutive month of an increased share of viewers’ time. July was also the third straight month that streaming’s share of TV use hit a high.
As for linear TV, broadcast networks fell to just 20 percent of viewing in July (vs. 20.8 percent in June). Cable came in at 29.6 percent, down from 30.6 percent the previous month. For both, it was a low point since Nielsen began releasing its monthly platform rankings, which it calls the Gauge, in June 2021. In those first monthly rankings, broadcast and cable accounted for 63.6 percent of all TV use in the United States, whereas now it’s at 49.6 percent.
Streaming, meanwhile, has grown from about a 26 percent share of viewing in June 2021 to 38.7 percent in July — a 48 percent jump.
Among individual streamers, YouTube (not including its YouTube TV service) led the way as usual with 9.2 percent of all TV use, followed by Netflix at 8.5 percent. Fox’s AVOD service Tubi had its best month to date with 1.4 percent of all use, tied with Max.
Acquired series led the streaming bump in July, with Suits on Netflix and Peacock accounting for more than 18 billion minutes of viewing during the month — about the same amount of viewing time as Stranger Things had in July 2022. Disney+’s Bluey had about 5 billion minutes of viewing for the month.
ADVERTISEMENT
Nielsen’s Gauge rankings for July 2023 are below.
Platforms:
Streaming: 38.7 percent of TV usage
Cable: 29.6 percent
Broadcast: 20 percent
Other: 11.6 percent
Streaming Services:
YouTube: 9.2 percent of total TV usage
Netflix: 8.5 percent
Hulu: 3.6 percent
Prime Video: 3.4 percent
Disney+: 2 percent
Max: 1.4 percent
Tubi: 1.4 percent
Peacock: 1.1 percent
Roku Channel: 1.1 percent
Paramount+: 1 percent
Pluto TV: 0.9 percent
All others: 5.1 percent
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