CaptainAmerica
Premium Member
I love the use of scare quotes.
You understand that they can't just come out and make public statements to investors about future capital investments that are just bull, right?
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Disney’s Q1 FY24 Earnings Results Webcast
- Thread starter DCBaker
- Start date
You understand that they can't just come out and make public statements to investors about future capital investments that are just bull, right?
Jessica Erlich with Bank of America securities. >> Thank you. You guys covered so much ground tonight.
I have one question and two follow-ups. You announced or for the first time I've heard you say this, that in parks 70% of the $60 billion in CapEx that you outlined over the next 10 years, I'm sorry, 70% of that will go to incremental capacity so to $40 billion in parks and attractions.
Can you give us color on timing and location?
There's been s peculation you may open a fifth gate in Florida.
One on paid share and crack down, which came up twice, have you sized the number of borrowers?
And on the sports JV, how do you plan to attract non-paid TV subs which sounds like what might be an expensive sports service without an -- who would actually save money? How do you not cannibalize?
BOB>> You asked a lot of questions on a lot of subjects. I'll take the first one on parks, timing and location.
We're already hard at work at basically determining where we are going to place our new investments and what they will be.
You can pretty much conclude that they will be all over, meaning every single one of our locations will be the beneficiary of increased investment and thus, increased capacity, including on the high seas where we're currently building three more ships and a business that is obviously extremely positive to us.
We may look expansively in that direction. I'm not going to give you more of a sense of timing except that we're hard at work at getting these things basically conceived and built.
And we have got a menu of things that will basically start opening in 25 and there will be a cadence every year of additional investment and increased capacity. I'll let you take care of the paid sharing, Hugh.
On the sports service and pricing, I think the way you have to look at it is the sports service is going to be substantially less expensive to consumers than the big bundle they would have to buy to get the same channels on cable and satellite.
Again, designed for two things. One, we believe there are a number of sports fans out there that want to watch sports on television but didn't want to sign up to the big cable and satellite bundle.
So we think they will be A -- accretive to us. We believe that consumers have left the bundle because it wasn't serving them well or they may leave the bundle and we want to make sure that we grab them too.
We view this whole thing as one being a good proposition for sports fans because of the cost and certainly being positive for us because of the dynamics in the marketplace right now.
HUGH >> Okay. And Jessica, I'll handle the paid sharing question. We have sized it.
I don't want to put a specific number out there right now because these numbers are obviously rough estimates anyway.
Suffice to say that the opportunity that we see on a percentage basis probably isn't all that dramatically different from what our competitor has found in terms of their subscriber base.
In terms of getting at it, there's a couple of actions that we've taken in order to do that.
Number one, we have some changes made to the user language that we have in the U.S., Canada and certain markets so we'll actually have the opportunity to act on the paid sharing opportunity.
Number two, the accounts that we think are doing unpaid sharing right now will get communication this summer and we'll give them opportunities to allow their borrowers to start new subscriptions.
And then later this year we'll actually also have account holders who want to allow further individuals to access their accounts from outside the household, they will be able to access the account for an additional fee.
We have got a number of tactical actions to take in order to take advantage of what we think is a pretty good size opportunity in front of us and it's one of the things that gives us confidence in our subscriber growth numbers.
I have one question and two follow-ups. You announced or for the first time I've heard you say this, that in parks 70% of the $60 billion in CapEx that you outlined over the next 10 years, I'm sorry, 70% of that will go to incremental capacity so to $40 billion in parks and attractions.
Can you give us color on timing and location?
There's been s peculation you may open a fifth gate in Florida.
One on paid share and crack down, which came up twice, have you sized the number of borrowers?
And on the sports JV, how do you plan to attract non-paid TV subs which sounds like what might be an expensive sports service without an -- who would actually save money? How do you not cannibalize?
BOB>> You asked a lot of questions on a lot of subjects. I'll take the first one on parks, timing and location.
We're already hard at work at basically determining where we are going to place our new investments and what they will be.
You can pretty much conclude that they will be all over, meaning every single one of our locations will be the beneficiary of increased investment and thus, increased capacity, including on the high seas where we're currently building three more ships and a business that is obviously extremely positive to us.
We may look expansively in that direction. I'm not going to give you more of a sense of timing except that we're hard at work at getting these things basically conceived and built.
And we have got a menu of things that will basically start opening in 25 and there will be a cadence every year of additional investment and increased capacity. I'll let you take care of the paid sharing, Hugh.
On the sports service and pricing, I think the way you have to look at it is the sports service is going to be substantially less expensive to consumers than the big bundle they would have to buy to get the same channels on cable and satellite.
Again, designed for two things. One, we believe there are a number of sports fans out there that want to watch sports on television but didn't want to sign up to the big cable and satellite bundle.
So we think they will be A -- accretive to us. We believe that consumers have left the bundle because it wasn't serving them well or they may leave the bundle and we want to make sure that we grab them too.
We view this whole thing as one being a good proposition for sports fans because of the cost and certainly being positive for us because of the dynamics in the marketplace right now.
HUGH >> Okay. And Jessica, I'll handle the paid sharing question. We have sized it.
I don't want to put a specific number out there right now because these numbers are obviously rough estimates anyway.
Suffice to say that the opportunity that we see on a percentage basis probably isn't all that dramatically different from what our competitor has found in terms of their subscriber base.
In terms of getting at it, there's a couple of actions that we've taken in order to do that.
Number one, we have some changes made to the user language that we have in the U.S., Canada and certain markets so we'll actually have the opportunity to act on the paid sharing opportunity.
Number two, the accounts that we think are doing unpaid sharing right now will get communication this summer and we'll give them opportunities to allow their borrowers to start new subscriptions.
And then later this year we'll actually also have account holders who want to allow further individuals to access their accounts from outside the household, they will be able to access the account for an additional fee.
We have got a number of tactical actions to take in order to take advantage of what we think is a pretty good size opportunity in front of us and it's one of the things that gives us confidence in our subscriber growth numbers.
CaptainAmerica
Premium Member
I didn't say they were fast.
disneylandtour
Active Member
Disneyland Forward for California and a couple of new Coke counters for Florida. See, everyone wins.
Sirwalterraleigh
Premium Member
That’s as firm as a box jellyfish
Surferboy567
Well-Known Member
That means they’d have to announce at THIS D23.
GhostHost1000
Premium Member
Wonder if they are counting Tiana Splash Mountain and Country Bear changes with a beignet cart “expansion”
Sirwalterraleigh
Premium Member
That joke sailed right past you
Disney Analyst
Well-Known Member
I think they know they need some real meat and potatoes announcements this time around. I am hopeful we get some official word at this years D23, with timelines.
Brian
Well-Known Member
Spoiler alert: 2029's capacity increase will be the Cake Bake Shop at Boardwalk.
Surferboy567
Well-Known Member
I’m really hoping for that and one of the chief reasons I’m hoping to attend.
Sirwalterraleigh
Premium Member
You've gotten all kinds of good parks news the last 2 D23 events. Encanto, Villans, Coco, more Moana... What more do you want?!?!?! All things that have op... started constr.... ummm... never mind.
Steven Kay hall with wells Wells Fargo please go a head. >> Thank you. Bob, you mentioned a lot of content in your remarks.
It seems like the operations are really starting to hum again but I think the lifeblood of the company is always going to be the studio output. It drives so much culture.
I think that's an area that you said you have been spending a lot of time on.
Do you feel like the content is also now turning the corner like you've seen in the operations?
If so, when do you think we might see some of the results of that with renewed focus on studio output.
And Hugh, -- might end up ultimately paying for Hulu, just wondering if you have sense on the timing of that outcome or situation?
And related to that, I think the exceeds $7.5 billion in savings was a bit new. Curious where you found the extra buckets of cost savings. Thank you.
BOB >> Steven, I feel great about where we are with the studio. Let's not lose sight of the fact that in the last year the studio had some real success, not to suggest we didn't have some that were not successful that we were really disappointed in.
We also had great success with the guardian sequel and avatar at the end of calendar 22 but part of fiscal 23.
One of the things that I have been saying before is that volume sometimes can be detrimental to quality.
In our zeal to greatly increase volume partially want to chase more global -- some of our studios lost focus.
The first step is we reduced volume, we reduced output particularly in Marvel. When you fix or address these issues in movies you do three things.
You get aggressive at making sure the films you're making can be even better.
Sometimes you kill projects you don't believe in and putted things in the pipeline that you do believe in. We're doing all of that.
I've also observed over the years that managing creativity sometimes is best done with great partnerships.
I have established great partnerships with the people at our company that really manage the creativity, Alan Bergman with the studio, Dana - - Jimmie petar oh at ESPN, and the partnerships that Alan and I have is a strong one and we believe that the time that I'm now devoting to this and the attention that the two of us are giving this business not only will bear fruit but it's already starting to.
We're very bullish about the films coming out. We mentioned inside-out 2 and talked about Deadpool and the planet of the anticipates film. We feel good about that.
We have mufausa, we're very excited about the addition of Moana which was the number one streamed movie across all streamers in the U.S. in 23 and has had over a billion hours of consumption on Disney Plus and that's going to be released in November.
Then I mentioned what we're doing after that. I would say we're leaning a little bit more into sequels and franchises, some that we feel great about, like Toy Story is a for instance, obviously Star Wars, avatar we've talked about, Marvel is starting to focus on some of its stronger franchises going forward. I'll leave it at that.
I think given the environment and given what it takes to get people out of their homes to see a film, doing that, leaning on franchises that are familiar is actually a smart thing. We have got work to do still. We are not resting on our laurels or sitting on our hands, we're working hard at it. I feel quite good about the .
HUGH >> Steve, from my perspective, regarding Hulu, timing, we have got a clearly defined process. That process is going to take a little bit of time based on the work that needs to go into valueing the business.
I would expect before we get to the end of the year we should have this figured out and closed. Regarding cost savings.
A -- when a company goes on a cost effort, once you start to build momentum on that, people tend to find additional opportunities.
That's what gives us the confidence around the numbers to at least meet if not exceed them. So no one specific area.
It's content side as well as SGNA side. I think we have momentum on managing our expenses more entirely, which is great news for investors.
It seems like the operations are really starting to hum again but I think the lifeblood of the company is always going to be the studio output. It drives so much culture.
I think that's an area that you said you have been spending a lot of time on.
Do you feel like the content is also now turning the corner like you've seen in the operations?
If so, when do you think we might see some of the results of that with renewed focus on studio output.
And Hugh, -- might end up ultimately paying for Hulu, just wondering if you have sense on the timing of that outcome or situation?
And related to that, I think the exceeds $7.5 billion in savings was a bit new. Curious where you found the extra buckets of cost savings. Thank you.
BOB >> Steven, I feel great about where we are with the studio. Let's not lose sight of the fact that in the last year the studio had some real success, not to suggest we didn't have some that were not successful that we were really disappointed in.
We also had great success with the guardian sequel and avatar at the end of calendar 22 but part of fiscal 23.
One of the things that I have been saying before is that volume sometimes can be detrimental to quality.
In our zeal to greatly increase volume partially want to chase more global -- some of our studios lost focus.
The first step is we reduced volume, we reduced output particularly in Marvel. When you fix or address these issues in movies you do three things.
You get aggressive at making sure the films you're making can be even better.
Sometimes you kill projects you don't believe in and putted things in the pipeline that you do believe in. We're doing all of that.
I've also observed over the years that managing creativity sometimes is best done with great partnerships.
I have established great partnerships with the people at our company that really manage the creativity, Alan Bergman with the studio, Dana - - Jimmie petar oh at ESPN, and the partnerships that Alan and I have is a strong one and we believe that the time that I'm now devoting to this and the attention that the two of us are giving this business not only will bear fruit but it's already starting to.
We're very bullish about the films coming out. We mentioned inside-out 2 and talked about Deadpool and the planet of the anticipates film. We feel good about that.
We have mufausa, we're very excited about the addition of Moana which was the number one streamed movie across all streamers in the U.S. in 23 and has had over a billion hours of consumption on Disney Plus and that's going to be released in November.
Then I mentioned what we're doing after that. I would say we're leaning a little bit more into sequels and franchises, some that we feel great about, like Toy Story is a for instance, obviously Star Wars, avatar we've talked about, Marvel is starting to focus on some of its stronger franchises going forward. I'll leave it at that.
I think given the environment and given what it takes to get people out of their homes to see a film, doing that, leaning on franchises that are familiar is actually a smart thing. We have got work to do still. We are not resting on our laurels or sitting on our hands, we're working hard at it. I feel quite good about the .
HUGH >> Steve, from my perspective, regarding Hulu, timing, we have got a clearly defined process. That process is going to take a little bit of time based on the work that needs to go into valueing the business.
I would expect before we get to the end of the year we should have this figured out and closed. Regarding cost savings.
A -- when a company goes on a cost effort, once you start to build momentum on that, people tend to find additional opportunities.
That's what gives us the confidence around the numbers to at least meet if not exceed them. So no one specific area.
It's content side as well as SGNA side. I think we have momentum on managing our expenses more entirely, which is great news for investors.
Laketravis
Well-Known Member
This pretty much sums it all up for Parks ..... which doesn't:
"You can pretty much conclude that they will be all over, meaning every single one of our locations will be the beneficiary of increased investment and thus, increased capacity, including on the high seas where we're currently building three more ships and a business that is obviously extremely positive to us.
We may look expansively in that direction. I'm not going to give you more of a sense of timing except that we're hard at work at getting these things basically conceived and built.
And we have got a menu of things that will basically start opening in 25 and there will be a cadence every year of additional investment and increased capacity."
I'll take SEVEN cruise ships for $20B, Bob!
"You can pretty much conclude that they will be all over, meaning every single one of our locations will be the beneficiary of increased investment and thus, increased capacity, including on the high seas where we're currently building three more ships and a business that is obviously extremely positive to us.
We may look expansively in that direction. I'm not going to give you more of a sense of timing except that we're hard at work at getting these things basically conceived and built.
And we have got a menu of things that will basically start opening in 25 and there will be a cadence every year of additional investment and increased capacity."
I'll take SEVEN cruise ships for $20B, Bob!
Brian
Well-Known Member
There's at least one "major" thing I know of expected to be announced at D23, but it's subject to change, as always. They've made changes to the presentation morning of in the past.
Go into it with tempered expectations, especially if you'd be traveling a great distance to go.
Brian Kraft with Deutsche bank. >> Good afternoon. Since there's so much discussion about bundleing and distribution, I was wondering if you could share observations go -- paid TV programming tiers, is there anything you could say about percentage of customers actually using it or engagement levels relative to the average Disney Plus subscriber and maybe lastly, do you think this is a model that you would like to replicate with other paid TV distributors over time as your agreements come up for renewal? Thanks.
BOB >> Thanks, Brian. It's really early. They didn't start introducing this to their subscribers really til January and they didn't roll it all out right away. We're seeing stats on this that are somewhat encouraging. I want to be careful that because it's early we are not sure whether the trends will continue or not. I do think that this kind of arrangement is one we'll likely see with other multi-channel distributors. It seemed like it was a win-win for both of us, important to us, obviously, because it gives us access to more of their customers and important to them In terms of bundleing this service with more of their multi-channel customers. I think you will see more in this direction. Too early yet.
BOB >> Thanks, Brian. It's really early. They didn't start introducing this to their subscribers really til January and they didn't roll it all out right away. We're seeing stats on this that are somewhat encouraging. I want to be careful that because it's early we are not sure whether the trends will continue or not. I do think that this kind of arrangement is one we'll likely see with other multi-channel distributors. It seemed like it was a win-win for both of us, important to us, obviously, because it gives us access to more of their customers and important to them In terms of bundleing this service with more of their multi-channel customers. I think you will see more in this direction. Too early yet.
Sirwalterraleigh
Premium Member
Announcements of what?
Things slated to open 3 years after Bob claims he’s leaving?
Put the pieces together here
GhostHost1000
Premium Member
Maybe they’ll announce and show concept art of new guest relations tents coming soon throughout all the parks
Laketravis
Well-Known Member
Shocker: Disney CFO is amazed how much screen time Fortnight users spend on video games.
Where's this genius been for the last 10 years?
Where's this genius been for the last 10 years?