Disney’s Q1 FY24 Earnings Results Webcast

[el_super]

Condolences to the people who had hoped Iger would be physically removed from the building yesterday.

 

[GhostHost1000]

Condolences to the people who had hoped Iger would be physically removed from the building yesterday.

He’s been mentally removed for awhile now

 

[Disney Analyst]

My goodness. Wall Street is happy. I think the strategy worked. Peltz hopes are dashed.

 

[monothingie]

That's just false. One thousand percent false. Disney+ was ALWAYS going to lose money in the opening years. That's what happens. You need to invest huge amounts in content and technology while you build your subscriber base, and profitability comes way later.

Netflix launched Streaming in 2007. They were barely profitable until 2017, TEN YEARS later, and then they went vertical. Disney+ is at the same point in its life cycle as Netflix was in 2012.

View attachment 767375

I think it was assumed by leadership and investors that it wouldn’t be profitable immediately. What was also assumed was that it would be wildly profitable when it got going.

There is no indication that that likely anytime soon, if not at all.

Also consider that the many parts of the structure of D+ have evolved since the original vision was pitched (Ads, Hulu integration, etc.).

So far from the

 

[MisterPenguin]

Profitable is return on capital employed in respect to others in the same competative space.

If you are returning 4% profit on every dollar spent and your competition is returning 11%, you are profitable but underperforming.

So, unless you're #1, you're underperforming?

Nice way to set Disney up for pronouncing it's a failure no matter how well they're doing.

 

[MisterPenguin]

People aren’t going to the movie theater anymore. Just look at the numbers.

Indeed. The total Box Office for 2023 is 80% of the last pre-pandemic year of 2019.

All the more reason to go all in on home entertainment.

 

[el_super]

So, unless you're #1, you're underperforming?

[insert goal posts moving gif]

Yes I am that lazy today.

 

[Nevermore525]

I think it was assumed by leadership and investors that it wouldn’t be profitable immediately. What was also assumed was that it would be wildly profitable when it got going.

There is no indication that that likely anytime soon, if not at all.

Also consider that the many parts of the structure of D+ have evolved since the original vision was pitched (Ads, Hulu integration, etc.).

So far from the

Disney said in 2019 they weren’t expecting profits to show up for D+ until Fiscal 2024. They weren’t claiming anything about being wildly profitable by now.

 

[doctornick]

No idea I don’t know anyone who watches Network tv.

My guess would be they are a much older demo so they may be more likely.

But who cares network is the past.

My point is that is how advertising for TV programs has always worked. They never had anywhere near 100% of people actually watching ads.

 

[the_rich]

Indeed. The total Box Office for 2023 is 80% of the last pre-pandemic year of 2019.

All the more reason to go all in on home entertainment.

I mean 2019 did have some massive releases..Notice anything similar among the top 8 lol

 

[MisterPenguin]

Netflix added 13 Millions subs last quarter.

Disney lost 1.3 Million.

Do you have a chart for that ?

No, because neither the content providers nor Wall Street care about the number of subs (anymore). They care about the number of dollars profit.

Disney+ has increased in revenue every quarter since it began, regardless of whether the number of subs go up or down.

Disney streaming will be getting:

• 50% more revenue from Hulu, now that they own all of it.
• More revenue from people who switch to the ad tier as they increase their subscriptions for the premium tier
• Continued roll out of the ad tier internationally
• Synergy of fully including Hulu into D+

Quarterly losses have shrunk every quarter for the past five quarters and they're on track to be profitable.

Cherry-picking one stat is disingenuous. It's not enough to oust Iger.

 

[Nevermore525]

No, because neither the content providers nor Wall Street care about the number of subs (anymore). They care about the number of dollars profit.

Disney+ has increased in revenue ever quarter since it began, regardless of whether the number of subs go up or down.

Disney streaming will be getting:

• 50% more revenue from Hulu, now that they own all of it.
• More revenue from people who switch to the ad tier as they increase their subscriptions for the premium tier
• Continued roll out of the ad tier internationally
• Synergy of fully including Hulu into D+

Quarterly losses have shrunk every quarter for the past five quarters and they're on track to be profitable.

Cherry-picking one stat is disingenuous. It's not enough to oust Iger.

Yup, they lost 1.3M subs, but domestic paying subs went from $7.50 to $8.15 and international went from $6.10 to $5.91

Q4 23 - $2.225B revenue

Q1 24 - $2.283B revenue

 

[MisterPenguin]

What happens when they have to start spending money on content again?

For this calendar year, TWDC will be spending more money on content than any other content provider.

 

[MisterPenguin]

I mean 2019 did have some massive releases..Notice anything similar among the top 8 lol

2024 is the new 2019!

 

[Trauma]

I don’t have time to give my full thoughts on these earnings right now so I’ll give the cliff notes.

#1. Masterclass in smokescreen by Iger I’ll give him his props. He has bought himself even more time to right the ship.

#2. Taylor Swift - Seems positive for D+ at least short term. May stem off some subscriber loss.

#3. ESPN deal - wait and see will be difficult to thread needle on pricepoint

#4. Fortnite - Ok seems fine. Don’t think it moves the needle long term but it’s whatever.

#5. Buybacks and dividend - Good. This is a company with no organic growth. Iger only grows the brand thru acquisition so mine as well return value to shareholder.

Summary : This to me is a smokescreen. Top line revenue miss, with profitability growing only thru cuts cuts and more cuts.

The second part of this story will be can Disney grow top line with much lower costs.

They have not proven they can, but Iger has time to prove just that.

I remain HIGHLY skeptical since this was clearly a throw everything and the kitchen sink earnings report to fend off Peltz.

So will Disney grow under the new cost structure?

That lays in the hands of Bob Iger and his management team.

 

[MisterPenguin]

I don’t have time to give my full thoughts on these earnings right now so I’ll give the cliff notes.

#1. Masterclass in smokescreen by Iger I’ll give him his props. He has bought himself even more time to right the ship.

#2. Taylor Swift - Seems positive for D+ at least short term. May stem off some subscriber loss.

#3. ESPN deal - wait and see will be difficult to thread needle on pricepoint

#4. Fortnite - Ok seems fine. Don’t think it moves the needle long term but it’s whatever.

#5. Buybacks and dividend - Good. This is a company with no organic growth. Iger only grows the brand thru acquisition so mine as well return value to shareholder.

Summary : This to me is a smokescreen. Top line revenue miss, with profitability growing only thru cuts cuts and more cuts.

The second part of this story will be can Disney grow top line with much lower costs.

They have not proven they can, but Iger has time to prove just that.

I remain HIGHLY skeptical since this was clearly a throw everything and the kitchen sink earnings report to fend off Peltz.

So will Disney grow under the new cost structure?

That lays in the hands of Bob Iger and his management team.

You should report this to the SEC!

 

[Sirwalterraleigh]

What can they say?

"Our fundamental structure is now predicated on overcharging for admission, rooms, food, attraction access, and merchandise so grotesquely that it cannot be sustained. Future bookings for our onsite resorts are far below our already reduced expectations, and we are removing rooms from inventory for weeks or months at a time to 'right size" staffing. Don't forget your commemorative Magical Earnings Report Cupcake and your exclusive Genie+plus+ access to buy tickets to our brand new Disney Springs After Hours - all the excitement and mystery of a closed shopping center!"

Well that’s what it is…in the end

The natives need raw meat. Sacrifice is needed.

It’s time to sacrifice HIM

 

[Sirwalterraleigh]

You should report this to the SEC!

Why?

They don’t care about any of it.

…eventually people will learn

 

[Trauma]

You should report this to the SEC!

Your off your game today.

I didn’t say anything was below board.

I said it was a masterclass.

 

[Trauma]

Disney+ has increased in revenue every quarter since it began, regardless of whether the number of subs go up or down.

Disney streaming will be getting:

• 50% more revenue from Hulu, now that they own all of it.
• More revenue from people who switch to the ad tier as they increase their subscriptions for the premium tier
• Continued roll out of the ad tier internationally
• Synergy of fully including Hulu into D+

Quarterly losses have shrunk every quarter for the past five quarters and they're on track to be profitable.

Cherry-picking one stat is disingenuous. It's not enough to oust Iger.

I wish I had more time to respond to this in full.

Let me give a quick hitter.

How many quarters in a row can they lose 1+ millions subs and still be profitable ?