News Chapek FIRED, Iger New CEO

[monothingie]

You almost sound like my grandmother in the 1980s... no one will want to pay for TV.

Do you really think that they will never be able to make money on movies again?
Or that no one will want to watch TV programming anymore?
Or Sports? Game Shows? Documentaries?

D+ is just a medium toward distribution. Unless you really want to believe that humans of the future will have no need for entertainment, D+ will find a way to be profitable. Do they need to reduce costs on content? Yes. Do they need to diversify their offerings? Yes. But you're looking at TODAY and assuming there is no hope for the future because they cannot change.

They can change.

Over dramatizing much?

Analysts are correctly looking for an immediate short term change to reign in the out of control spending. Looking at a hypothetical longterm change in direction down the path doesn't help at all.

Disney decided to go all in on Marvel and Star Wars to be the foundation and primary driver for growth with D+. They bet that expensive marquee productions would drive subscriber growth. Turns out it was a bad bet. Could they come up with something that may fix it in the future? IDK. But what they have on tap for the next 12 months certainly seems like more of the same which has been failing.

 

[MisterPenguin]

 

[monothingie]

What is Disney specific about this content creation model that makes it too expensive?

Bluey potentially drives more subscribers towards D+ than $200M D+ Marvel productions. Let that sink in.

 

[SJN1279]

I think that Disney Wish has a chance to be a huge success for Disney on the movie front.

 

[el_super]

Disney decided to go all in on Marvel and Star Wars to be the foundation and primary driver for growth with D+. They bet that expensive marquee productions would drive subscriber growth. Turns out it was a bad bet.

Why? They had fantastic sub growth right out of the gate. They clearly planned to spend big to build subscribers and planned for profitability in 2024. What makes you think that plan isn't working?

But what they have on tap for the next 12 months certainly seems like more of the same which has been failing.

So if they do reach profitability in 2024, would you still considering it failing?

 

[monothingie]

Why? They had fantastic sub growth right out of the gate. They clearly planned to spend big to build subscribers and planned for profitability in 2024. What makes you think that plan isn't working?



So if they do reach profitability in 2024, would you still considering it failing?

 

[Bender123]

That Forbes article doesn't mention if the cost of their regularly scheduled new ship, the surprise purchase of another ship and all the extra costs of retrofitting it, and the cost of their new island is part of their expense, which would surely put them in the red -- in the short term.

It also doesnt mention that the Capital Spending Budget went over by a drunken night out buying these ships and new Island...These were all planned purchases that got top line sign off.

The issue isnt what was spent, its that they cant depend on the profits that they assumed would float them through a bad movie or slower than expected D+ profitability. Its that it is, at this time, a loser in a sea of losers. Parks are currently floating the company, but if the reports of decreases are accurate, then a less than expected profit surrounded by a film studio that last $100s of Millions, a cruise line that lost $100s of millions, a streaming platform that lost $100s of millions, a completely stalled entertainment industry and a deadline for a $10 billion buyout of Hulu on the horizon...Its not hard to see why in a normal year, this wouldnt be a huge issue, but in a year like this, its a significant hole.

 

[el_super]

View attachment 733198

So yeah... if they reach profitability by 2024 are you still going to consider it a failure?

 

[MisterPenguin]

It also doesnt mention that the Capital Spending Budget went over by a drunken night out buying these ships and new Island...These were all planned purchases that got top line sign off.

The issue isnt what was spent, its that they cant depend on the profits that they assumed would float them through a bad movie or slower than expected D+ profitability. Its that it is, at this time, a loser in a sea of losers. Parks are currently floating the company, but if the reports of decreases are accurate, then a less than expected profit surrounded by a film studio that last $100s of Millions, a cruise line that lost $100s of millions, a streaming platform that lost $100s of millions, a completely stalled entertainment industry and a deadline for a $10 billion buyout of Hulu on the horizon...Its not hard to see why in a normal year, this wouldnt be a huge issue, but in a year like this, its a significant hole.

The article explains how the 'hole' in the Cruise Line budget was filled with borrowing from certain groups (whom I don't fully understand). But, the takeaway is that they didn't raid the parks to fill that hole. And the article says that room capacity on the ships is hitting over 95% which means they'll be very profitable and be able to pay back those loans.

Lots of companies were in the red during the pandemic and are still climbing out of it. And companies often go into the red when they invest in new areas of hopeful profit (e.g., a new store or factory or ship).

All that money spent for making up for losses or for investing in new venture always comes out of previous successes of other divisions. It's standard capitalistic economics.

Even when a business borrows money to open up a new venture/store/ship, until that venture is profitable, the business's other ventures are paying off that loan. And even if the business has the cash in the bank to start up a new venture, that stored-up cash came from the business's other divisions.

Yes, businesses put up a 'wall' between divisions, but that's to determine on the financial forms how well they're doing -- or not. But in the end, that 'wall' is very permeable.

Despite all those holes in the various divisions, TWDC profited $1.2B last quarter.

 

[MisterPenguin]

Bluey potentially drives more subscribers towards D+ than $200M D+ Marvel productions. Let that sink in.

Sixty percent of D+ subscribers are households without children. Let that sink in.

 

[MisterPenguin]

View attachment 733198

That chart includes a huge loss of subscribers in the past 2 quarters from India because Disney didn't pay an exorbitant fee to carry their Cricket League. Those Indian subs were paying, on average, sixty cents per person.

In that same period, world wide revenue for D+ went up, and the overall operating loss went down two quarters in a row.

This is why Wall Street doesn't care any more about the number of subs... but apparently, you do.

But, nice cherry picking of data!!

 

[monothingie]

That chart includes a huge loss of subscribers in the past 2 quarters from India because Disney didn't pay an exorbitant fee to carry their Cricket League. Those Indian subs were paying, on average, sixty cents per person.

In that same period, world wide revenue for D+ went up, and the overall operating loss went down two quarters in a row.

This is why Wall Street doesn't care any more about the number of subs... but apparently, you do.

But, nice cherry picking of data!!

So then they shouldn’t have counted towards the total subscriber count in the first place then. You’re trying to have it both ways.

Either way you want to present it, domestic subscriptions still decreased by several hundred thousand in 2023.

 

[Nubs70]

What is Disney specific about this content creation model that makes it too expensive?

The cost to produce content which is endemic to not only DIS but the industry as a whole.

One needs to consider the customers time view. With all the available content and distribution channels such as YouTube, Max, Podcasts, the consumers available time is finite.

If the consumer will devote 90 min to entertainment content, what is the cost to produce 90 minutes of YouTube compared to an 90 minutes of of traditional studio content?

If distribution goes to streaming only, YouTube and studio distribution come closer to equalized cost to distribute. This leaves studios with order of magnitude higher content creation costs. For studios to compete with "self created content", production costs must be constrained in order to get close to acceptable net contribution margins.

This is what the SAG strike is about.

 

[monothingie]

So yeah... if they reach profitability by 2024 are you still going to consider it a failure?

So because Disney says it to be, then it is.

Unprecedented demand will last forever!!!

 

[MisterPenguin]

So then they shouldn’t have counted towards the total subscriber count in the first place then. You’re trying to have it both ways.

Either way you want to present it, domestic subscriptions still decreased by several hundred thousand in 2023.

And the international subs that aren't India increased enough to offset the domestic decrease in number of subs. It was the loss of subs in India that swamped the rest of the world's subs.

But the 'core' market (which is Europe and North America) had enough new subs at a higher ARPU that revenue increased and operating losses decreased. Having less customers is financially sound if the customers that are left are going to pay more to make up for the loss of customers.

That's a route towards profitability. Which you are saying isn't going to happen by posting a chart of overall subs without any nuance of ARPUs or bottom line numbers.

It's still cherry-picking.

 

[el_super]

Either way you want to present it, domestic subscriptions still decreased by several hundred thousand in 2023.

Did the price increases offset the loss of subscribers?

So because Disney says it to be, then it is.

Just answer the question. It shouldn't be this hard.

 

[Robbiem]

Interesting concept. What independent cable channel operators are still out there? Does anyone own AMC?

Maybe Disney could make a deal with the BBC for some of their content. Although I seem to remember there are some legalities with doing so since they are a government operation.

The BBC have made a deal with Disney over Dr Who rights so I’m sure they could expand it, although most of their programs are now made by outside production companies (here in the UK a lot turn up on Netflix).

As an aside the Dr Who deal didn’t go down too well in places like Australia where people now have to subscribe to watch a show thats been on free to air for almost 50 years

BBC and Disney Branded Television join forces on Doctor Who

Disney+ to become new global home for upcoming seasons of Doctor Who outside the UK & Ireland, BBC continues as Doctor Who's exclusive home in the UK

www.bbc.co.uk

ABC's 50-year Doctor Who partnership ends after BBC confirms Disney+ deal

Doctor Who will no longer appear on the ABC beyond the current season.

www.abc.net.au

 

[el_super]

If distribution goes to streaming only, YouTube and studio distribution come closer to equalized cost to distribute. This leaves studios with order of magnitude higher content creation costs. For studios to compete with "self created content", production costs must be constrained in order to get close to acceptable net contribution margins.

I don't disagree with this, but it comes down to thinking that, in the future, people won't want to pay a premium cost for premium entertainment. That cheaper to produce YouTube/TikTok streams will supplant traditional movies and TV production.

That could be true, and if it is, Disney would be dead no matter what.

I don't really think it's true though.

 

[el_super]

The BBC have made a deal with Disney over Dr Who rights so I’m sure they could expand it, although most of their programs are now made by outside production companies (here in the UK a lot turn up on Netflix).

Wow you're right... I totally forgot about the Dr. Who deal, and Bake Off being on Netflix.

 

[Nubs70]

I don't disagree with this, but it comes down to thinking that, in the future, people won't want to pay a premium cost for premium entertainment. That cheaper to produce YouTube/TikTok streams will supplant traditional movies and TV production.

That could be true, and if it is, Disney would be dead no matter what.

I don't really think it's true though.

Anecdotal as it may be, I do not see the teenagers/young adult obsession to go to the movies. They all sit around on YouTube