News Bob Iger is back! Chapek is out!!

[MisterPenguin]

I think I missed what we are talking about here. What is working? They have more subscribers, but didn't they have a LARGE miss on their profitability for the year?

Larger than expected. But it was going to be large anyway. Disney's guidance was that about this time would be the largest deficit that D+ throws before eventually becoming profitable in 2024 (that's when they planned to hike up the sub cost).

Wall Street used to be on board with that guidance and buoyed Disney stocks over it. Now they're panicking.

When Netflix had two quarters of declining subs, Wall Street panicked and dumped the stocks of all the streamers, including the two most likely to be profitable in the end: Both Netflix and Disney. That other media companies have fared far worse (see Disney's power point rebuttal) over this Wall Street flight.

Remember Wall Street? How they kept being nervous about traditional entertainment media because of the cord cutting? They're now punishing the solution.

Mind you: This is mostly the speculator cohort of Wall Street. The ones that trade large amounts of stock daily hoping to 'beat the system.' Long term investors are still issuing a 'buy' on Disney stock.

 

[MisterPenguin]

Disney was playing Robin Hood with their own business. Stealing from the rich (parks) to give to the poor (streaming)

When a company wants to open up a new division which they think will be profitable in the end, where are they going to get the money from?

From other parts of the company.

Either directly from those divisions' profits, or the savings that have been accruing because of those division profits, or borrow the money.

And if they borrow the money, how are they going to start paying it back?... Except from the profits of other divisions.

 

[Sirwalterraleigh]

You’re the one looking too short-term. Temporary stress for long-term gain. Futurepoofing so there’s a Disney for the next generation.

I’ve been accused of many things Over the years…and not all of them are true

…but “short term outlook on Disney”?
You take the cake there.

 

[Joel]

I hope we aren’t gonna say:
1. More people paying alot more.
2. Watching commercials
3. Nobody ever cancels

That's it. That's the plan.

I'd love to know what price point they need to reach to make it profitable. It's definitely a lot more than I'm paying now.

 

[Sirwalterraleigh]

Think about how few businesses have the luxury of taking time to build their subscriber base and figure out profitability. Very few. Netflix had that Silicon Valley startup money. Disney had brainwashed audiences and steady demand at the entrance gate.

I’m actually thinking about how Netflix had not one…but two delivery models long before anyone else…
…and they’ve made little money of it to this day.

 

[Sirwalterraleigh]

That's it. That's the plan.

I'd love to know what price point they need to reach to make it profitable. It's definitely a lot more than I'm paying now.

SSSHHHHHHHHHH!

you’re gonna upset the children

 

[UNCgolf]

Netflix worked so well in the early days because they were mainly just licensing existing content rather than paying to develop it themselves. That was a much cheaper way to acquire content for the service.

Disney+ could probably work similarly to early Netflix because of their massive library and the continued popularity (at least hopefully for Disney) of Disney/Pixar animated films and Marvel (i.e. they would be spending very little to develop new content specifically for the service), but they want it to more that (it would probably turn a profit under that model but it wouldn't generate the level of revenue they're looking for).

Streaming won't work under the current pricing model when combined with the costs to actually produce their own shows and films if those shows/films don't make significant money elsewhere first. They'll have to introduce unskippable advertising and/or dramatic price increases.

 

[_caleb]

I think I missed what we are talking about here. What is working? They have more subscribers, but didn't they have a LARGE miss on their profitability for the year?

Subscribers and market share—they’re not about to be bought out by another platform. That was the plan all along.

The plan was always to ignore losses until FY2024 (October of this year), which was their self-imposed deadline to get to profitability.

 

[GhostHost1000]

It's called INVESTING -- Established companies do it with their own resources, upstarts need to borrow or find investors to do it. Nothing Robin Hood about it... in other companies they call it 'emerging technologies' or whatever.

Not every market is in the black from the start. Disney communicated this from the start.

right....but you don't take out a second mortgage and not pay anything back - it would be different if park expansion and maintenance were at the same levels as before but they aren't. They are doing this to themselves and wounding the money printing part of their business

 

[GhostHost1000]

Not sure what “mess” you keep referring to.

 

[Sirwalterraleigh]

....

Ummmm…yeah…

 

[_caleb]

I’ve been accused of many things I’ve the years…and not all of them are true

…but “short term outlook on Disney”?
You take the cake there.

Wow, I LOVE cake!

I’m still not sure what your solution would have been for Disney. The writing was on the wall—and has been for some time now. But you seem to be more on the side of “stay the course, the old way works!”

I never took you for a pixie duster…

 

[flynnibus]

right....but you don't take out a second mortgage and not pay anything back

But that's nothing like they were doing. So please stop trying. Taking your existing profits is not 'taking out a second mortgage'

 

[GhostHost1000]

When a company wants to open up a new division which they think will be profitable in the end, where are they going to get the money from?

From other parts of the company.

Either directly from those divisions' profits, or the savings that have been accruing because of those division profits, or borrow the money.

And if they borrow the money, how are they going to start paying it back?... Except from the profits of other divisions.

well let's see... they already had the movies/media division right? Overpaying for Fox and trying to do Disney+ while living in Fantasyland shouldn't mean the parks suffer yet here we are

 

[_caleb]

right....but you don't take out a second mortgage and not pay anything back

They’re still in the middle of the plan!

If your spouse supports the family financially while you’re going back to school to get a PhD, they don’t usually expect you to pay them back before you earn the degree.

 

[GhostHost1000]

But that's nothing like they were doing. So please stop trying. Taking your existing profits is not 'taking out a second mortgage'

If I have 2 buckets of water....and take from one bucket to put more in another... and then let the water in the previous bucket continue to evaporate without refilling....well...that could be a problem when both need water

 

[Sirwalterraleigh]

Wow, I LOVE cake!

I’m still not sure what your solution would have been for Disney. The writing was on the wall—and has been for some time now. But you seem to be more on the side of “stay the course, the old way works!”

I never took you for a pixie duster…

You should trust your instincts then.

Disney isn’t a “speculative” enterprise…it’s durable and stable.

The biggest mistakes that got them to the point where investors are looking to raid/drain them is because Bob Iger portrays them as speculative. All roads lead back to Rome here.

 

[GhostHost1000]

They’re still in the middle of the plan!

they are in the middle of a hole they've dug themselves and then jumped into.... without a long enough rope (plan)

 

[_caleb]

I’m actually thinking about how Netflix had not one…but two delivery models long before anyone else…
…and they’ve made little money of it to this day.

This is why Disney took so long to go all-in on streaming. Hulu was a hobby while they watched and waited. Netflix’s struggle was that they were forced to get into producing original content. This was much more expensive than licensing. But they’re on a similar trajectory now.

 

[Disney Analyst]

You can always tell when some people just refuse to accept the landscape of media is changing