News Disney’s Q1 FY25 Earnings Results Webcast

[flynnibus]

You're right, they blew billions...to make hundreds of millions.

Kodak is on line 1 for you...

What is the revenue opportunity lost by not licensing out their content to third party distribution like Netflix rather than keeping it in-house and essentially paying themselves for the ability to do so?

How much is netflix losing by not licensing out their content?

What major media distribution company is doing great in 2025 by following 1995 business models these days?
What major movie studio is doing great in 2025 by following 1995 business models these days?

Disney isn't just a production company or indie studio creating content. They had billions in revenue that relied on a business model that was dying and the investing world as a whole yearned from predictable revenue from recurring revenue... not just sale of product.

The DTC market got crowded because everyone knew they couldn't be left behind... tho obviously not all succeed but sitting back and just retreating to a content-creator only isn't a growth strategy either.

 

[Dranth]

You're right, they blew billions...to make hundreds of millions.

I believe it would be more accurate to say they spent billions to own assets that are used to make hundreds of millions in profit currently.

Assuming those billions are lost implies they couldn't sell any of those assets if they choose to and that the service will not bring in more than it is currently in the future.

 

[TrainsOfDisney]

sitting back and just retreating to a content-creator only isn't a growth strategy either.

it wouldn’t have been the worst idea. Put Netflix and Apple on a bidding war to see who will pay the most for “exclusive” Disney content.

 

[Jrb1979]

When the CEO says it several times a year how GSATs go down when crowded and go up when not so crowded, and so, their goal is to regulate overcrowding with steep price hikes and surge pricing and reservations. And how that's OK, because the increased spending per person makes up for lower attendance.

And how reduced-capacity evening nights and parties keep selling out.

It's surprising when people don't believe Disney and guests want lower attendance.

I agree to some extent. They don't crowds like in 2029 again. At the same time IMO they have gone too far with regulating it. When they gone past the tipping point for value resorts and hoping those in the deluxes will cover those losses by increasing those prices. IMO is not a recipe for success

 

[Agent H]

I agree to some extent. They don't crowds like in 2029 again. At the same time IMO they have gone too far with regulating it. When they gone past the tipping point for value resorts and hoping those in the deluxes will cover those losses by increasing those prices. IMO is not a recipe for success

What Do you mean 2029?

 

[flynnibus]

it wouldn’t have been the worst idea. Put Netflix and Apple on a bidding war to see who will pay the most for “exclusive” Disney content.

A notion that only works if you think you can control the finite, limited and desirable resource...

In case you didn't notice, those guys started creating their own content, and showed they could corner customers even without 'your stuff'. So trying to sit back and think you are king of the mountain while the world moves away from you is exactly how giants die.

The ideas of someone like netflix paying you huge premiums forever isn't going to happen. They eventually learn to fish themselves... and then you start to lose as your competition not only has competing products, but advantages in GTM and advertising.

That was already happening - and when your distribution becomes your competition... well you better do something.

 

[JD80]

I understand some people have experiences like this, but it hasn't been mine. Whether or not they meant to do it, they 100% made the parks more enjoyable for us by slowing the return to pre-2020 levels. Again, we went from not going to going every year.

That doesn't mean I don't want a nighttime parade, shuttered attractions to be used, better maintenance around property, quality of merch/food improved, or want to see employees overloaded. It just means my experience does not match what you are describing.

It's been a long week and my brain is tired so I hope this makes sense.

I think Disney has figured out that the best crowd level for park ops and profitability is 2012-2016 levels (which is where we are at). Any more and the crowds negatively impact GSATs etc.

I think this is the case because Values and Moderates are leveled out cost wise. Daily tickets have leveled out as well outside of inflationary pressures. However, they haven't figured out how much they can profit off of the top level spenders that stay at Deluxes. They are trying to optimize all the extras that you can buy and figure out how much they can get out of those with more money.

Only issue is balancing out LL** vs. merch vs. table service. That money is interchangable with Value and Moderate guests so one hand is stealing from the other. Which is why I'm willing to bet they are at some point going to play with LL** and dining plans for the Value and Moderate guest.

What does that look like? Well, that can be a few different things.

1. Offer free dining and see if those guests with free dining purchase more LL** than those guests who don't have free dining based on the customer profile (Value/Mod/Deluxe guest)
2. Remove LLMP altogether - this is probably tested with limiting LLMP/SP inventory to see if the guests who don't buy LLMP/SP instead spend money on Table Service. Then maybe survey them later to see if they purchased merchandise during their stay. Or track it through MB usage.
   
   If they can prove that all the majority of lost revenue from eliminating LLMP (SP won't go away) is indeed going to Food and Bev or Merch they might just find the right price point of LLPP and get rid of MP.

Anyway, outside looking in, it appears Disney is nickel and diming guests with all these options (and people thinking that are right to do so) but what they are doing is finding out how to increase guest spending optimally.

@lentesta likes to joke that there are 40 ways to get in line. I'm willing to bet now (and I didn't think this a few weeks ago) that there is a chance that eventually the Lightning Lane stuff is going to be streamlined to just LLPP and LLSP once they can figure out where all the money can go (and @Jrb1979 can crow that he was right all along).

(this post is way too long)

 

[TrainsOfDisney]

A notion that only works if you think you can control the finite, limited and desirable resource...

i honestly don’t even know what point you are making… just trying to point out how I’m wrong?

So what did Disney+ do wrong in your opinion, or you think they knocked it out of the park?

 

[flynnibus]

i honestly don’t even know what point you are making… just trying to point out how I’m wrong?

So what did Disney+ do wrong in your opinion, or you think they knocked it out of the park?

You said to license out their content - presumably instead of changing their business model which was a studio that relied on theatres, bundled cable deals, and linear TV.

The old model was dying. Disney was not just a production company and movie studio. It was a conglomerate that had billions in assets and fingers in multiple revenue streams. They couldn't just ride those into the ground and then decide 'oh, I guess this isn't gonna be a thing anymore'.

To suggest D+ was bad and they should have just licensed content out and stay the status quo would undercut so much of your ability to control your destiny, and WHY studios got into distribution and performance in the first place.

Look at players like WB these days... it's not for lack of amazing content in why they are struggling as a business.. it's for their lack of navigating the new world order.

 

[Animaniac93-98]

A cornerstone of Disney's business has always been the distribution of their back catalog. Starting with theatrical re-releases, then moving on to episodes of their weekly TV show, The Disney Channel and home video, the goal has always been to get new generations to pay for access to their old movies. They were the only studio to frame their entire library (not just sub brands of titles or series) as collectible and essential for families.

Their own streaming service was the logical choice to do so and more than any other studio they had the built in nostalgia and audience to sign up for one. Simply licensing would have left money on the table and allowed others to decide how and when to present these titles.

But it's also for this reason I've questioned how necessary the expensive, original series were essential to selling the service and retaining subscribers when data suggests engagement is often driven by the same established catalog.

 

[TrainsOfDisney]

But it's also for this reason I've questioned how necessary the expensive, original series were essential to selling the service and retaining subscribers when data suggests engagement is often driven by the same established catalog.

That was my suggestion from a few pages ago. Disney+ should have been the “Disney Vault” - sold for more money - and no original content (or very little - like documentary stuff).

 

[MisterPenguin]

The audio from the call is now available....

Disney’s Q1 FY25 Earnings Results Webcast - The Walt Disney Company

The Walt Disney Company hosted a live audio Q&A webcast to discuss fiscal first quarter 2025 financial results on Wednesday, February 5, 2025.

thewaltdisneycompany.com

 

[BrianLo]

I believe it would be more accurate to say they spent billions to own assets that are used to make hundreds of millions in profit currently.

Assuming those billions are lost implies they couldn't sell any of those assets if they choose to and that the service will not bring in more than it is currently in the future.

Exactly. It’s the whole silly premise that there isn’t revenue, the productions weren’t paid for by consumer revenue and the company doesn’t own the barrels of content along the way.

Some of it has been brand damaging. The transition has been messy. But there’s a viable service there at the end of the day and they went a whole lot less in the hole than on Hulu… or Netflix for that matter.

Not to mention fair market value on D+ as a service is likely north of 50 billion if the market is at all accurate on Hulu.

What doesn’t track is the same crowd crowing for capital expenditures and growth in the parks and criticizing capital at the same time in the media space. They built a huge service, with a large customer base that is profitable in significantly less time than most of their resorts. I support capital expenditure spend full stop across the board, because otherwise the position is borderline illogical.


But to a few people’s point, American D+ is still the mediocre offering. They need to hurry the transition along.

 

[Tha Realest]

The irony in all of this is that if any entertainment entity has a “vault” today, it’s….Netflix.

The only way you can (legally) watch their shows / movies / documentaries is if you have, or have access to, a subscription. Want to watch Stranger Things S1 or Extradition? Better have a subscription; they aren’t on DVD or purchasable on iTunes or Amazon.*

Comparatively speaking, if I want to watch, say, Pinocchio, I can see it on D+, Disney Channel, possibly licensed to other channels, iTunes, Amazon, Fandango, or dig up a copy on VHS, DVD, Blu-Ray, or 4K BD.


*I think they did produce a VHS set for one of the seasons of Stranger Things, but that is a very rare exception.

 

[TrainsOfDisney]

It’s the whole silly premise that there isn’t revenue, the productions weren’t paid for by consumer revenue and the company doesn’t own the barrels of content along the way.

Well there wasn’t revenue for a while -
The productions were not paid for by consumer revenue (there was no revenue to pay for mandolorian, lady and the tramp, etc.)

But yes - the company does own that content now.

Not to mention fair market value on D+ as a service is likely north of 50 billion if the market is at all accurate on Hulu.

But you can’t really sell Disney+ any easier than you can sell Disney World - it’s part of the brand.

What doesn’t track is the same crowd crowing for capital expenditures and growth in the parks and criticizing capital at the same time in the media space.

That’s like saying it doesn’t track when the same crowd criticizing Igers huge salary wants the front of line CM’s to get a raise.

 

[CJR]

The irony in all of this is that if any entertainment entity has a “vault” today, it’s….Netflix.

The only way you can (legally) watch their shows / movies / documentaries is if you have, or have access to, a subscription. Want to watch Stranger Things S1 or Extradition? Better have a subscription; they aren’t on DVD or purchasable on iTunes or Amazon.*

Comparatively speaking, if I want to watch, say, Pinocchio, I can see it on D+, Disney Channel, possibly licensed to other channels, iTunes, Amazon, Fandango, or dig up a copy on VHS, DVD, Blu-Ray, or 4K BD.


*I think they did produce a VHS set for one of the seasons of Stranger Things, but that is a very rare exception.

I actually have a box set of Stanger Things S1 on DVD (maybe Blu-ray), but it's designed to look like a VHS tape. I bought mine at Target a ways back. Felt like it was a pointless purchase though.

 

[Minnesota disney fan]

That was my suggestion from a few pages ago. Disney+ should have been the “Disney Vault” - sold for more money - and no original content (or very little - like documentary stuff).

We signed up for Disney + when it first came out, and were very disappointed that it didn't include all of their classic movies over the years. We thought that's what it would contain, along with newer shows. So, we cancelled and never looked back.

 

[MisterPenguin]

The irony in all of this is that if any entertainment entity has a “vault” today, it’s….Netflix.

The only way you can (legally) watch their shows / movies / documentaries is if you have, or have access to, a subscription. Want to watch Stranger Things S1 or Extradition? Better have a subscription; they aren’t on DVD or purchasable on iTunes or Amazon.*

Most things 'locked' to a specific streamer usually becomes available as a pay-for or rental title on those streamers that rent/digitally-sell titles, such as on Amazon or Vudu.

However, how is this exclusive content any different in the before-days when there was no streaming, but there was a popular series on HBO like the Sopranos, Oz, Six Feet Under, or True Blood?

 

[MisterPenguin]

We signed up for Disney + when it first came out, and were very disappointed that it didn't include all of their classic movies over the years. We thought that's what it would contain, along with newer shows. So, we cancelled and never looked back.

Most of them have been added over the years.

 

[BrianLo]

Well there wasn’t revenue for a while -
The productions were not paid for by consumer revenue (there was no revenue to pay for mandolorian, lady and the tramp, etc.)

There was always revenue from the moment the service opened. You are confusing revenue with operating income. There wasn’t enough revenue for the service to not post a loss, but it ran a loss precisely because the productions were paid.

Now the productions are paid AND Disney pockets the spare change AND they have control. It’s the far better outcome than staying old media.