Laketravis
Well-Known Member
New CFO is frothing at the mouth over additional expense cuts waiting to be made.
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Disney’s Q1 FY24 Earnings Results Webcast
- Thread starter DCBaker
- Start date
CaptainAmerica
Premium Member
The engagement from the Taylor Swift socials is huge already. This is a version of the tour that has NOT been released anywhere else. In full, from beginning to end. Not the theatrical version, not the VOD version.
Taylor Swift on Instagram: "This week is truly the best kind of chaos. I’m thrilled to let you know I’ve found a streaming home for The Eras Tour Concert Film, and that home will be @disneyplus. For the first time we’ll be showing the entire concert
8M likes, 0 comments - taylorswift on February 7, 2024: "This week is truly the best kind of chaos. I’m thrilled to let you know I’ve found a streaming home for The Eras Tour Concert Film, and that home will be @disneyplus. For the first time we’ll be showing the entire concert (including...www.instagram.com
IG itself is already at 1.1 million likes.
If they're smart, they'll also release a PG version for kids. They have a cut of Avatar with the cursing dubbed out and it's a really smart feature for their target audience.
Dranth
Well-Known Member
That is part of the plan. They'll just stream it on ESPN+ driving subs. Bob wins again!
CaptainAmerica
Premium Member
That's not what a CFO does.
Sirwalterraleigh
Premium Member
Integrated stream and betting is gonna be a societal crisis
No one has to believe me know…just sit back and watch
CaptainAmerica
Premium Member
Brer Oswald
Well-Known Member
That’s basically what this is though. A Disney metaverse “mode” being developed by Epic for Fortnite. It’s no groundbreaking return to the gaming industry.
Sirwalterraleigh
Premium Member
I just finished going through the report
…if he’s “winning” then there’s something wrong with the scoreboard
This is one of the most elaborate gloss jobs in the history of American business…
But hey…I made money, right? Who cares about longevity and being a fan?
Dranth
Well-Known Member
No, but it got him 1.5 billion in shares from a group that is going to vote for his board while they'll also make some money off of it.
BrianLo
Well-Known Member
The separate holding companies that house the films do, but when D+ amortizes the films is when it gets directly counted towards the DTC production costs as a line item. Otherwise it’s currently financed in the holding companies.
Laketravis
Well-Known Member
Really? Every CFO I've ever known or employed was enthusiastic about any and every opportunity to reduce expenses. In their words, "a dollar of expenses eliminated is equal to three additional dollars of revenue"........
Just said: "We remain focused on expense reducing initiatives...."
Hugh...
Moving to our results by segment.
At entertainment, first quarter operating income, more than doubled, driven by significant improvement at direct-to-consumer.
Entertainment direct-to-consumer operating income improved by about $850 million versus the prior year, and by nearly $300 million versus Q4.
And revenue increased sequentially by over 10%, benefiting from higher subscription and advertising revenuer.
Operating income in the first quarter was better than the guidance the company gave in the last earnings call, primarily due to expense favorability.
Hulu subscribers increased by 1.2 million from Q2 to Q1.
And Disney core subscribers Jamboardcy convertibley by 1.3 million, in line with prior guidance, driven by the expected temporary uptick in churn given the domestic price increases as well as the end of the global summer promotion.
Those impacts were partially offset by strong ad tier net ads due to domestic growth as well as the launch in certain international markets in the first quarter.
Domestically we saw continued net additions to our bundled offerings in Q1 which as a reminder have significantly lower churn versus our stand alone products.
Disney Plus core RPU increased by 14 cents versus the prior quarter and by one dollar seven cents versus the prior years.
We expect Disney plus core RPU to increase during the second quarter due to the benefit of pricing increases which should be only partially offset by the impact of -- to the Disney Plus ad tier.
I'll note we are being paid on all entitled charter subs which will also be a key driver of accelerated Disney Plus core subgrowth in Q2.
We expect net ads of between 5.5 and $6 million in the second quarter.
Domestic net ads are expected to be in the $7.5 million range driven by charter entitlements net of cannibalization.
And international core subs are expected to decrease modestly reflecting changes to certain wholesale deals and slightly elevated churn impacts from price increases.
While subscriber growth will vary from quarter to quarter, we are confident in our prospects for ongoing subgrowth over the longer term driven by the continued global strength of our content slate, advancing our paid sharing efforts, technology advances that are intended to improve our content promotion and discovery capabilities, drive up engagement, and lower churn, the impact of making Hulu content available on Disney Plus for bundle subs and continued adoption of the bundle domestically, which should both increase engagement and lower churn, a strategy we will repeat in Latin America this summer when we combine Disney Plus and star plus.
And our continued use of tiering to provide subscribers with more choices.
As it relates to the opportunity we see on paid sharing, beginning this summer, Disney plus accounts suspected of improper sharing will be presented with new capabilities to allow their borrowers to start their own subscriptions.
Later this calendar year, account holders who want to allow access to individuals from outside their household will be able to add them to their accounts for an additional fee.
While we are still in the early days and don't expect notable benefits from these paid sharing initiatives until the back half of calendar 2024, we want to reach as large an audience as possible with our outstanding content and we're looking forward to rolling out this new functionality to improve the overall customer experience and grow our subscriber base.
For Q2, we are expecting revenue at entertainment DTC to grow sequentially and anticipate that operating losses will be relatively in line with the first quarter.
We still expect to reach profitability at our combined streaming businesses in Q4 of fiscal 2024 and have never been more confident about our path to creating a strong and sustainable streaming business with growing subscribers over the long-term and ultimately double digit operating margins, a business which we fully expect to be a key earnings growth driver for the company.
Moving to our results by segment.
At entertainment, first quarter operating income, more than doubled, driven by significant improvement at direct-to-consumer.
Entertainment direct-to-consumer operating income improved by about $850 million versus the prior year, and by nearly $300 million versus Q4.
And revenue increased sequentially by over 10%, benefiting from higher subscription and advertising revenuer.
Operating income in the first quarter was better than the guidance the company gave in the last earnings call, primarily due to expense favorability.
Hulu subscribers increased by 1.2 million from Q2 to Q1.
And Disney core subscribers Jamboardcy convertibley by 1.3 million, in line with prior guidance, driven by the expected temporary uptick in churn given the domestic price increases as well as the end of the global summer promotion.
Those impacts were partially offset by strong ad tier net ads due to domestic growth as well as the launch in certain international markets in the first quarter.
Domestically we saw continued net additions to our bundled offerings in Q1 which as a reminder have significantly lower churn versus our stand alone products.
Disney Plus core RPU increased by 14 cents versus the prior quarter and by one dollar seven cents versus the prior years.
We expect Disney plus core RPU to increase during the second quarter due to the benefit of pricing increases which should be only partially offset by the impact of -- to the Disney Plus ad tier.
I'll note we are being paid on all entitled charter subs which will also be a key driver of accelerated Disney Plus core subgrowth in Q2.
We expect net ads of between 5.5 and $6 million in the second quarter.
Domestic net ads are expected to be in the $7.5 million range driven by charter entitlements net of cannibalization.
And international core subs are expected to decrease modestly reflecting changes to certain wholesale deals and slightly elevated churn impacts from price increases.
While subscriber growth will vary from quarter to quarter, we are confident in our prospects for ongoing subgrowth over the longer term driven by the continued global strength of our content slate, advancing our paid sharing efforts, technology advances that are intended to improve our content promotion and discovery capabilities, drive up engagement, and lower churn, the impact of making Hulu content available on Disney Plus for bundle subs and continued adoption of the bundle domestically, which should both increase engagement and lower churn, a strategy we will repeat in Latin America this summer when we combine Disney Plus and star plus.
And our continued use of tiering to provide subscribers with more choices.
As it relates to the opportunity we see on paid sharing, beginning this summer, Disney plus accounts suspected of improper sharing will be presented with new capabilities to allow their borrowers to start their own subscriptions.
Later this calendar year, account holders who want to allow access to individuals from outside their household will be able to add them to their accounts for an additional fee.
While we are still in the early days and don't expect notable benefits from these paid sharing initiatives until the back half of calendar 2024, we want to reach as large an audience as possible with our outstanding content and we're looking forward to rolling out this new functionality to improve the overall customer experience and grow our subscriber base.
For Q2, we are expecting revenue at entertainment DTC to grow sequentially and anticipate that operating losses will be relatively in line with the first quarter.
We still expect to reach profitability at our combined streaming businesses in Q4 of fiscal 2024 and have never been more confident about our path to creating a strong and sustainable streaming business with growing subscribers over the long-term and ultimately double digit operating margins, a business which we fully expect to be a key earnings growth driver for the company.
Notes from Neverland
Well-Known Member
Exactly. Never said it was groundbreaking. But, partnering with someone who already does it (and does it pretty well) makes a lot more sense than building out something new from scratch. Fortnite's new games, like LEGO, prove that Disney could build out full games with EPIC within Fortnite. It's just a good decision.
CaptainAmerica
Premium Member
That thing was never a "metaverse," it got branded that way in an early headline and it stuck. It was basically supposed to be a connected economy where your Disney+ profile connects to your Castaway Club and your D23 and your My Disney Experience etc etc.
It was never going to be a thing where you put on an Oculus headset and go into some kind of VR world.
Hugh....
Moving on to entertainment linear networks, the decrease in the first quarter operating income versus the prior year was due to lower advertising and affiliate revenues, partially offset by lower programming and production costs.
Lower domestic advertising revenue was driven primarily by lower impressions, including from strike-related impacts, in addition to an adverse comparison to the prior year midterm-related political advertising and our own stations.
Domestic entertainment affiliate revenue decreased by 5% in the first quarter versus the prior year, as a 5 point benefit from higher rates was more than offset by a 10 point decline from fewer subscribers.
Adjusted for the non-carriage of certain networks at charter as a result of our recent deal, the subdecline impact was closer to 7%.
Lower programming and production costs benefited from strike-related impacts, and we also remain focused on driving ongoing cost efficiencies.
Content sales, licensing and other, results came in lower versus the prior year and below the guidance we provided due to the performance of theoretical titles in the quarter.
We do not have any new key theoretical releases in Q2 due to production delays stemming from the strikes and expect content sales, licensing and other operating income to come in roughly break even for the quarter.
Moving on to entertainment linear networks, the decrease in the first quarter operating income versus the prior year was due to lower advertising and affiliate revenues, partially offset by lower programming and production costs.
Lower domestic advertising revenue was driven primarily by lower impressions, including from strike-related impacts, in addition to an adverse comparison to the prior year midterm-related political advertising and our own stations.
Domestic entertainment affiliate revenue decreased by 5% in the first quarter versus the prior year, as a 5 point benefit from higher rates was more than offset by a 10 point decline from fewer subscribers.
Adjusted for the non-carriage of certain networks at charter as a result of our recent deal, the subdecline impact was closer to 7%.
Lower programming and production costs benefited from strike-related impacts, and we also remain focused on driving ongoing cost efficiencies.
Content sales, licensing and other, results came in lower versus the prior year and below the guidance we provided due to the performance of theoretical titles in the quarter.
We do not have any new key theoretical releases in Q2 due to production delays stemming from the strikes and expect content sales, licensing and other operating income to come in roughly break even for the quarter.
Hugh...
Sports operating income improved versus the prior year due to strength at ESPN, partially offset by lower results at star India driven by higher rights costs from airing of the ICC cricket World Cup.
At domestic ESPN year over year growth was driven largely by the increase of programming and production costs by the timing of college football play off games.
Domestic affiliate revenue in Q1 was comparable to the prior year as an increase of 6% of higher contractual rates -- fewer subscribers.
ESPN's domestic ad sales in the quarter were down 2% versus the prior year but up mid-single digits when adjusted for timing shifts and one time impacts.
The strength we're seeing gives us confidence that leaning into sports will continue to create value for our shareholders.
Second quarter to date, we are seeing continued healthy advertising demand in the sports marketplace with domestic ESPN cash ad sales pacing up double digit percentage points versus the prior year.
The trend is still solid even when adjusted for the CFP timing shift of an additional game as well as an extra NFL divisional game in Q2 this year.
Sports operating income improved versus the prior year due to strength at ESPN, partially offset by lower results at star India driven by higher rights costs from airing of the ICC cricket World Cup.
At domestic ESPN year over year growth was driven largely by the increase of programming and production costs by the timing of college football play off games.
Domestic affiliate revenue in Q1 was comparable to the prior year as an increase of 6% of higher contractual rates -- fewer subscribers.
ESPN's domestic ad sales in the quarter were down 2% versus the prior year but up mid-single digits when adjusted for timing shifts and one time impacts.
The strength we're seeing gives us confidence that leaning into sports will continue to create value for our shareholders.
Second quarter to date, we are seeing continued healthy advertising demand in the sports marketplace with domestic ESPN cash ad sales pacing up double digit percentage points versus the prior year.
The trend is still solid even when adjusted for the CFP timing shift of an additional game as well as an extra NFL divisional game in Q2 this year.
Which we all know is a technical impossibility, because otherwise it would have been done years ago. Right?
Jrb1979
Well-Known Member
The engagement from the Taylor Swift socials is huge already. This is a version of the tour that has NOT been released anywhere else. In full, from beginning to end. Not the theatrical version, not the VOD version.
Taylor Swift on Instagram: "This week is truly the best kind of chaos. I’m thrilled to let you know I’ve found a streaming home for The Eras Tour Concert Film, and that home will be @disneyplus. For the first time we’ll be showing the entire concert
8M likes, 0 comments - taylorswift on February 7, 2024: "This week is truly the best kind of chaos. I’m thrilled to let you know I’ve found a streaming home for The Eras Tour Concert Film, and that home will be @disneyplus. For the first time we’ll be showing the entire concert (including...
IG itself is already at 1.1 million likes.
Those same 1.1 million also skipped Disney this past summer to see her. That's what the argument from many was on any attendance was down.