Disney’s Fiscal Full Year and Q4 2022 Earnings Results Webcast

[Jrb1979]

Content spending seems to be just burning through cash that Disney could otherwise use to invest in more profitable segments with little (if any) light at the end of the tunnel.

IMO it's why streaming will never be that profitable for any company. They have to spend too much money for new shows to get people subscribing. IMO what's going to end up happening is most will end up costing the same per month as it did with cable.

 

[Jrb1979]

Yes, spend less on content. That is a great idea which will definitely keep subscribers around!!

Then he prepared to end up paying as much as you did for cable.

 

[HauntedPirate]

Then he prepared to end up paying as much as you did for cable.

Not going to happen. Binge and purge will take over.

 

[BrianLo]

Something I realized yesterday...

HBO and Netflix have both been boasting their cancellations in the trade papers recently. In the broader sense, I realize that the street is trying to adjust how they value streaming services, and they're definitely now focusing more on profitability rather than subs, but both Netflix and HBO has shown a desire to take the hard path of reducing costs...

... while Disney has not.

In fact I didn't hear much mention from Disney/News about the 30+ billion Disney promised to spend on new content. Did they try to walk that back at all?

I actually don’t think they have the same overspending problem per se. They certainly ramped up when subscribers ramped.

They have an ARPU ‘problem’. Which I put in quotations because it’s self designed to fleece people into subscribing in droves. That ARPU problem starts to unwind with the 37% price hike in December. If their ARPU was remotely close to Netflix they’d be laughing to the bank.

Now whether or not Bob and the board continue on their path or let the street panic them into submission is another matter. But cost cutting while trying to retain and ramp up prices, would seem a poor idea to me.

For context ‘we’ (or our parents) would pay 30$ to own a single VHS of Disney content 30 years ago. Now one can have literally their entire back catalogue and a torrent of high spend content for the price of a cup of coffee a month. D+ is far too cheap (by design). The runway is endless when subscribers aren’t fleeing from Netflix at 16.7USD and even Hulu is gaining subscribers in the 12’s currently.

This comes down to can Disney raise prices and the addicts will still stick around? You bet, I’m confident in that bet. One thing is certain, Disney loves cranking up prices and the addicts never quit.

 

[Jrb1979]

Not going to happen. Binge and purge will take over.

It will eventually get there in price. People want more new content. It costs lots of money to make that content. The money to pay for it has to come from somewhere. That somewhere is by the subscribers. If Disney or any of these companies want to actually make money then they need to charge $30 to $40 a month.

 

[HauntedPirate]

It will eventually get there in price. People want more new content. It costs lots of money to make that content. The money to pay for it has to come from somewhere. That somewhere is by the subscribers. If Disney or any of these companies want to actually make money then they need to charge $30 to $40 a month.

Good luck with that!

 

[CaptainAmerica]

D+ is far too cheap (by design).

And the bundle is even worse.

Ad free D+, Hulu, and ESPN+ at $20 is insane value, especially when you consider that ESPN+ is worthless.

 

[Sirwalterraleigh]

Seeing a lot of calls for Chapek to step down today. Interesting.

So it’s “a day ending in Y”?

 

[Sirwalterraleigh]

It will eventually get there in price. People want more new content. It costs lots of money to make that content. The money to pay for it has to come from somewhere. That somewhere is by the subscribers. If Disney or any of these companies want to actually make money then they need to charge $30 to $40 a month.

The profit has always been In the product for Disney…

Should be In streaming too…they just lost their way there too. For now

 

[el_super]

Now whether or not Bob and the board continue on their path or let the street panic them into submission is another matter. But cost cutting while trying to retain and ramp up prices, would seem a poor idea to me.

Yeah I agree. I don't think the content spending is all that much of an issue if there is still room to raise the price.

 

[Jrb1979]

Yeah I agree. I don't think the content spending is all that much of an issue if there is still room to raise the price.

Good luck with that according to @HauntedPirate and @Sirwalterraleigh. There is no way streaming services will continue to stay under $20 a month.

 

[Sirwalterraleigh]

Yeah but kids like watching animated movies over and over and over.

We won't really know what the sub count does until Disney stops spending money on new content.

Kids attention supply diminishes by the minute and will continue to do so. And birthdate is declining…

…we’ll talk about when you get older

 

[HauntedPirate]

And the bundle is even worse.

Ad free D+, Hulu, and ESPN+ at $20 is insane value, especially when you consider that ESPN+ is worthless.

Hey now, some of us like watching hockey games out of our local area. And college softball.

 

[Jrb1979]

Hey now, some of us like watching hockey games out of our local area. And college softball.

I watch a lot of NHL games that aren't in my local area. It's not my fault Americans don't like hockey

 

[HauntedPirate]

Good luck with that according to @HauntedPirate and @Sirwalterraleigh. There is no way streaming services will continue to stay under $20 a month.

Please try to follow along. Reducing content spending but increasing the price is a stupid stance to take. If they continue spending on content, they at least have some justification to raise the price. But raising the price from $10/month to $30/month or more without some serious and significant content adds is ludicrous.

 

[Sirwalterraleigh]

Good luck with that according to @HauntedPirate and @Sirwalterraleigh. There is no way streaming services will continue to stay under $20 a month.

Prices will go up for sure…the market is ripe for lems…

But there is a cost ceiling where it will turn. At least we can assume so because of living through the cable era.

 

[Sirwalterraleigh]

Hey now, some of us like watching hockey games out of our local area. And college softball.

I save money on nhl…as it stands now

 

[flynnibus]

It will eventually get there in price. People want more new content. It costs lots of money to make that content. The money to pay for it has to come from somewhere. That somewhere is by the subscribers. If Disney or any of these companies want to actually make money then they need to charge $30 to $40 a month.

Nah...

Remember the content companies were always paying to make content. But before they had distributors pay them to get access to it.. that meant fewer, but bigger deals.

Now we have a DirectToConsumer market... where the expectation is smaller deals, but higher volumes. It's a newish space so there is agressive pricing and policies to try to get people on the hook.

The expectation in the market today is the customer is fluid (can turn off at any time)... Who says that convention will stick around? Who says PPV doesn't get bigger and bigger? Who says 'ad-free' will really stick around?

The companies could survive without $30-$40 per subscriber before... and now it's DTC so no middleman markup.. They have many more knobs than simply jacking a adhoc monthly rate 3-5x.

 

[SplashJacket]

At this current price for Disney, I don't see how a company doesn't try to buy them.

 

[CaptainAmerica]

At this current price for Disney, I don't see how a company doesn't try to buy them.

Who?