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

[Crunchie9]

Seemed like it was a tone and attitude thing. DTC streaming costs are out of control and Chapek's entire presentation was sunshine and rainbows.

The guidance was also super sketchy. "DTC still on track to be profitable in 2024 as long as there isn't a recession next year" isn't super optimistic guidance when there's absolutely going to be a recession next year.

He wanted to hear a Zuckerberg-esque "yeah, this isn't great, and here's what we're doing to fix it."

Well…. A recession is two Qs of negative economic growth, and we have been in a decline since June 2021, so……….. in a few months we will meet the definition of a “DEPRESSION”

That being said Disney shouldn’t be under 100$ a share and while there maybe more pain, I can’t see Disney staying down forever. I sold at 194.. might be time to buy back in.

 

[flynnibus]

But raising the price from $10/month to $30/month or more without some serious and significant content adds is ludicrous.

'exclusivity'

When the alternatives go away and you want your fix... price tolerance takes a backseat. It's worked for P&R for the last 20 years

 

[Jrb1979]

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.

I'm not saying its going to happen over night but it will eventually get there.

 

[flynnibus]

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

I can think of at least 200+ billion reasons... each with george w on them

 

[Crunchie9]

I can think of at least 200+ billion reasons... each with george w on them

100,000,000.00 x 0.06= $6,000,000 a year in just debt service.

 

[GhostHost1000]

I think they should require all executive level people at the WDC to visit WDW like a normal guest, 1 day in each park, use genie+ as well, and try to do as much as possible. Don’t forget those park and dining reservations

See how much of the magic you are

 

[Crunchie9]

I think they should require all executive level people at the WDC to visit WDW like a normal guest, 1 day in each park, use genie+ as well, and try to do as much as possible. Don’t forget those park and dining reservations

See how much of the magic you are

At rack rate. Go build some light sabres and take the magical express as well

 

[Sir_Cliff]

Honestly, if Disney reporting a profit of "only" $3 billion leading to to a sudden dip in the share price over concerns streaming will not become profitable in the near term doesn't help people to see how the way the economy works is directly responsible for screwing up the parks, I don't know what will.

Sure, this management may be worse than others at mediating between increasing the profitability of P&R while maintaining the quality of the experience. The IP mandate is also something about which most investors could not care less. However, as long as Disney being wildly profitable risks significant dips in the share price and hysterical pundits calling for the CEO to be fired on the basis that the prospects are uncertain about it becoming consistently more wildly profitable quarter upon quarter, the parks will be the most obvious target for finding new ways to grow profitability quarter upon quarter. This is doubly true in a moment like the present when Disney is transitioning into a new field that investors want it to but that no-one has so far figured out how to make work as a sustainable business.

Disney reporting the theme parks are profitable and that profits are rising in line with inflation for the foreseeable future is bad news in this context.

 

[castlecake2.0]

Where's "So Dear To My Heart"?

Where's "So Dear To My Heart"?

Honestly I was searching for that one the other day!

 

[Rickcat96]

Streaming is way too costly at the level Disney wants it. All the $ the lost to licensing, DvD sales and the apparent loss at the box office (because they need to come up with content for streaming)

 

[flynnibus]

Honestly, if Disney reporting a profit of "only" $3 billion leading to to a sudden dip in the share price over concerns streaming will not become profitable in the near term doesn't help people to see how the way the economy works is directly responsible for screwing up the parks, I don't know what will.

But it's not the 'economy' -- This is about individual stock performance. Which is driven by forward looking statements more than the past. Disney is getting bad investor action because they spent more than people expected and the outlook for profits in streaming is not as rosey as people would like.

The action is more about Streaming and DTC as a macro thing and way less about Disney's P&R division.

 

[CaptainAmerica]

Streaming is way too costly at the level Disney wants it. All the $ the lost to licensing, DvD sales and the apparent loss at the box office (because they need to come up with content for streaming)

DVD sales, box office, and cable TV were dying before the pivot to streaming. That's the piece people are leaving out. It's not like they abandoned a gravy train to dive into streaming, the gravy train was heading off a cliff if they did nothing. You can't compare 2024 streaming to 2012 box office and cable, you need to compare 2024 streaming to projected 2024 box office and cable.

 

[Sir_Cliff]

But it's not the 'economy' -- This is about individual stock performance. Which is driven by forward looking statements more than the past. Disney is getting bad investor action because they spent more than people expected and the outlook for profits in streaming is not as rosey as people would like.

The action is more about Streaming and DTC as a macro thing and way less about Disney's P&R division.

By 'the economy', I mean the role of the share market and institutional investors in the economic system. My point is that the incentives are for endless growth, often pushing companies into speculative ventures based on these types of outlooks and predictions. I don't think any element of that works well for those who want Disney to stop cutting costs and raising prices at the parks, which are primarily of interest to investors to the extent that they give Disney profits to report every quarter.

I get that Disney+ is going to be hard to make profitable and also think Disney has actually so far done a pretty good job of establishing themselves as one of the major players in the streaming market. But if a $3 billion profit is a bad result for a company that I don't think anyone is predicting will become unprofitable anytime soon, there's a problem.

 

[EricsBiscuit]

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.

There’s going to have to be serious consolation and price increases for streaming to be profitable.

 

[brb1006]

Honestly I was searching for that one the other day!

I just want to see Danny the adorable lamb!

 

[TalkingHead]

DVD sales, box office, and cable TV were dying before the pivot to streaming.

Frozen 2 made $1.4 billion worldwide in 2019. That’s a dying box office? Would it have been better if they’d released it straight to Dis+ and forgone the ticket sales?

IMO the pivot to streaming was Iger’s shortsighted attempt to muscle into Netflix and Amazon territory because at the moment they were the hot new film/tv landscape. But now Star Wars is more about retaining quarterly tv subs than ticket sales, and it barely has any cultural prestige left. Marvel is coasting on a fan base that was built over the 2010s with the theatrical model, and TWDC animation divisions are flailing with what’s become a lackluster return to theaters. (Stay tuned for Strange World.)

Paramount by contrast made a mint on Maverick by holding it back from steaming, and they’ve invested in the lower-budget horror film Smile that has paid off handsomely at the box office. Avatar will make money in large part because it’s made by a filmmaker who understands spectacle and showmanship.

Arguably the biggest problem with Chapek is he seems to have absolutely no feel for the entertainment business. Not sure Iger really did, either, but he could fake it better. It’s far more obvious that Chapek shouldn’t be the head of what is still an entertainment company, end of story.

 

[MisterPenguin]

Well…. A recession is two Qs of negative economic growth, and we have been in a decline since June 2021, so……….. in a few months we will meet the definition of a “DEPRESSION”

That being said Disney shouldn’t be under 100$ a share and while there maybe more pain, I can’t see Disney staying down forever. I sold at 194.. might be time to buy back in.

Last quarter GDP was up. So, that breaks the two-quarter 'trend.'

Also, 2 quarters *by itself* is not what makes a recession. But you can Google what does.

 

[CaptainAmerica]

Frozen 2 made $1.4 billion worldwide in 2019. That’s a dying box office? Would it have been better if they’d released it straight to Dis+ and forgone the ticket sales?

If Frozen 2 came out in 2024 it would still go to theaters so I'm not sure what point you're making. Chapek talked about this in an interview today. Tentpoles and blockbusters are doing okay. Everything else is dead.

 

[Animaniac93-98]

Arguably the biggest problem with Chapek is he seems to have absolutely no feel for the entertainment business. Not sure Iger really did, either, but he could fake it better. It’s far more obvious that Chapek shouldn’t be the head of what is still an entertainment company, end of story.

Eisner and Wells were studio heads before moving to Disney. Iger was a part of ABC when it was acquired by Disney. Even Ron Miller had worked his way up to film producer before being placed in charge of the company.

We rag on Chapek for his lack of hospitality/theme park experience, but he may be the first person in the role of Disney CEO to have zero experience making movies or TV shows. The closest thing would be advertising home video.

Regardless of how their distributed, making movies is still Disney's bread and butter business. Now made more important that all theme park investments must directly relate to said movies. Kind of important that the CEO know more about the process and stakeholders.

 

[MisterPenguin]

Streaming is way too costly at the level Disney wants it. All the $ the lost to licensing, DvD sales and the apparent loss at the box office (because they need to come up with content for streaming)

How does Netflix, then, do it?

Streaming, in a way, has saved Box Office disasters (looking at you, Mandalorian, replacing new SW theatrical releases).

Disney Studios, when they're not remaking old IP, consistently puts out bombs that fail financially. And so, now they're almost exclusively creating content for D+. But, it fills the void on D+ that Disney channel B-level entertainment used to fill on cable.

I will agree that too often animated movies went unfortunately directly or too quickly to D+. But that seems to be changing.

And Marvel's D+ series are about stories that would never have been made for theatrical releases.

20th Century and Searchlight are still attempting to make theatrical releases that are less expensive but hopefully popular or award/prestige material.