News Josh D’Amaro Named Next CEO of The Walt Disney Company

[Disney Irish]

So that's the excuse of the day? It's not mature enough.

Hold on let me check...has Disney been involved in the entertainment business for a while? 100 years? Really? You don't say...

Maybe the fact that Disney can't control their out of control spending and has a terrible organizational structure which breeds inefficiency and poor decision making has something to do with it.

So did Netflix have out of control spending and have a terrible organizational structure when they had below 10% margins for half its existence?

You cannot expect above 20% margins immediately, it takes time to build things up and that costs money. So that isn't an excuse, that is reality. Margins will improve, they have and as @BrianLo mentioned its expected to be above 10% in the upcoming quarter, and will continue to improve every quarter beyond that.

 

[BrianLo]

This is not an anything to be proud of.

When it’s faster than everyone else at a scale beyond everyone else, it is impressive.

Riddle me this: who ran more of a capital deficit last fiscal year. Parks/cruises or streaming?

 

[HauntedPirate]

So, basically, many people around here are looking at D+ doing this ad infinitum:

You all have massive buy-and-hold positions on DIS stock, right?

 

[Disney Irish]

Yes, for which I would argue, if they cannot get the upper middle class or upper class (with a shrinking middle class), it is not because they don't have the money or don't enjoy that type of entertainment...it is because they don't see the value. While at the same time, pricing out what remains of the middle class.

Its a balance, and I won't say that they shouldn't improve the experience so value is seen, they should. But at the same time you cannot just keep prices low just for the middle class because then its see as a lower valued experience for the upper middle class or upper class for other reasons, same reason why you don't see the upper middle class or upper class shopping at discount stores like Dollar Tree.

 

[monothingie]

So did Netflix have out of control spending and have a terrible organizational structure when they had below 10% margins for half its existence?

You cannot expect above 20% margins immediately, it takes time to build things up and that costs money. Margins will improve, they have and as @BrianLo mentioned its expected to be above 10% in the upcoming quarter, and will continue to improve every quarter beyond that.

Netflix certainly did not have the advantages that Disney had.

Which included all on day 1:

• Access to a massive library of extraordinary IP.
• Access to a massive successful studio.
• Access to linear and cable TV assets.
• Access to Sports.
• Veteran executives
• An existing ecosystem for content generation and distribution.
• Massive amounts of money to spend.

And yet Disney completely mucked it up. Ruined numerous IP franchises in the process. Angered and diluted their fan base. Wasted a ton of money. Left the stock price in a total malaise which continues to this day.

So just stop your nonsense excuse making.

 

[Disney Irish]

You all have massive buy-and-hold positions on DIS stock, right?

I wouldn't call it massive, but yes I do.

 

[Kamikaze]

D+ has been around how long? With every reimagining of the service model and pricing structure it doesn't move the needle. The costs are way too high and the organization far to bloated to ever be competitive with the market leaders.

Uhh, you know D+ has the third most subs, right? And when you include Hulu, solid #2, possibly #1 in the US.

 

[monothingie]

Uhh, you know D+ has the third most subs, right? And when you include Hulu, solid #2, possibly #1 in the US.

So when you count subs twice or three times over for the same unified service what does that make the total number of actual users?

Feel free to take off you shoes and socks if needed.

There's a reason why subs don't factor anymore.

But if you want to talk subs and something successful, why not look at Tubi as a model for profitability and subscriber growth.

 

[Kamikaze]

So when you count subs twice or three times over for the same unified service what does that make the total number of actual users?

Are you saying they're going to count the D+ and Hulu subs twice? Because I'm not.

 

[Disney Irish]

Netflix certainly did not have the advantages that Disney had.

Which included all on day 1:

• Access to a massive library of extraordinary IP.
• Access to a massive successful studio.
• Access to linear and cable TV assets.
• Access to Sports.
• Veteran executives
• An existing ecosystem for content generation and distribution.
• Massive amounts of money to spend.

And yet Disney completely mucked it up. Ruined numerous IP franchises in the process. Angered and diluted their fan base. Wasted a ton of money. Left the stock price in a total malaise which continues to this day.

So just stop your nonsense excuse making.

I find it funny that you have a peer in streaming (basically the only real peer) that showed the path lock step that Disney is now taking in terms of its growth and you say "nah it doesn't count".

Stop throwing the baby out with the bath water. Growth is happening, so just watch it and see.

 

[BrianLo]

So, basically, many people around here are looking at D+ doing this ad infinitum:

You all have massive buy-and-hold positions on DIS stock, right?

There appears to be an ongoing misunderstanding where their money comes and goes. I’ve seen you make a couple of insinuations about park underinvestment because of stock buybacks.

I think it would be conceptually helpful to know that experiences sans consumer products made 7.817B last fiscal year and the company spent 8.024B on parks related capital.

For the majority of parks life during periods of investment, entertainment has usually been covering a portion of the bill. It’s only recently that their experiences portfolio has become large and varied enough that it can fully cover its own investments.

I am very, very supportive of parks investment, but the timescale it runs on is generally far longer to turn around than what we’ve seen out of the 5 years on streaming. So we can’t really mock streaming while eschewing the virtue of even longer term thinking on parks.

 

[monothingie]

Stop throwing the baby out with the bath water. Growth is happening, so just watch it and see.

You can certainly gauge the excitement on that anemic growth based on the stock price.

 

[UNCgolf]

I don't think they're going to eliminate the Jungle Cruise, but...

from a utilization standpoint, they could do far better with that plot. Not that Jungle Cruise is unpopular or underutilized, but it takes up an absolutely massive amount of space. If they demolished it, they could probably build an E ticket, a C ticket (maybe a D), a restaurant, and shops on the land it occupies, which would obviously serve far more people than Jungle Cruise itself.

I wouldn't call it safe just because it's popular.

 

[monothingie]

Are you saying they're going to count the D+ and Hulu subs twice? Because I'm not.

So if someone pays for D+ and Hulu using the unified D+ app, they are counted 2X as subscribers to D+?

 

[Disney Irish]

You can certainly gauge the excitement on that anemic growth based on the stock price.

I don't gauge value or growth based on the whims of analysts temper tantrums.

 

[BrianLo]

why not look at Tubi as a model for profitability and subscriber growth.

We did and you didn’t follow through with citations, because you don’t have them. I was giving you an opportunity to see if you were in good faith mistaken or not. Tubi is 6 months younger than D+ if you want to ignore its pre-aqusition history.

It makes less, has a smaller subscriber base (despite being free), less revenue by almost a factor of five, smaller margins and smaller income by almost a factor of five.

What you were citing incorrectly was Murdoch statement that eventually he thinks they’ll have 20-25% margins, not that they currently do.

For the record, I think they’ve done a good job there too. But Disney’s streaming foray is ahead of them on every metric. And even when they achieve 20-25% margins? Tubi makes 250M a quarter - down the road. Disney already is reaching 500M today. Scale matters and there is a reason everyone has suddenly defaulted to percentages and margins, because you’ve gradually lost the predictive battle with @Disney Irish and I.

 

[Dranth]

Netflix certainly did not have the advantages that Disney had.

Netflix also had a 12 year head start and I wouldn't under estimate the advantage of being the first out the door with something like streaming. Even then, streaming wasn't generating much in the way of profits for them until around year 7 or 8 if I remember correctly. Disney just started year six.

I don't disagree that there aren't a number of things Disney could have handled better, but people acting like this is horrible or as good as it is ever going to get are being just as short sighted as people claiming it is going to be wildly profitable.

What it is and has always been is the best replacement available to a dying segment.

 

[Disney Irish]

So if someone pays for D+ and Hulu using the unified D+ app, they are counted 2X as subscribers to D+?

Nope, they are counted as a bundle sub, ie 1 sub.

 

[monothingie]

I don't gauge value or growth based on the whims of analysts temper tantrums.

Go back 10 years. This isn't a startup. When stock hasn't even kept up with inflation over the past 10 years, there's more going on than an idiot analysts temper tantrums.

 

[monothingie]

What it is and has always been is the best replacement available to a dying segment.

That has consistently had lower margins than Linear...yeah best.

Streaming is the new cable, just with more steps and an app.