Disney’s Q1 FY24 Earnings Results Webcast

MisterPenguin

MisterPenguin

President of Animal Kingdom
Premium Member
Nathanson >> One for you, Bob, one for Hugh. Bob, answering Ben's question, we're still wondering how does Hulu live fit into the long-term picture h ere? It stopped growing, YouTube is twice the size.

When you think about the future of your offerings, how does that fit into what you just announced with direct over the top ESPN and sports bundle?

And for Hugh, you broke the news too with double digit margin target for streaming. Any help on a time table that gets us there or what factors do you think will drive you from here to double digits in the next couple years? Thanks.


BOB >> As you know, Hulu Live more reflects the bigger, fattier bundle of television channels like many other services out there.

It just happens to be integrated or attached to Hulu if you subscribe to it.

So this, in a way I guess you would argue, competes with Hulu live directly but it doesn't compete with Hulu because this will be bundled with Hulu.

If you're a Hulu subscriber and you want to get this new sports service, you can buy that as an add-on to Hulu.

And as we see it, that's a real positive, because if you consider the fact that Disney Plus and Hulu will be together once we come out of beta in March, they're already together in beta, and then you add a sports feature, with so many sports that this new joint venture will offer, that's very, very compelling in terms of reducing churn for Hulu and increasing engagement.

So we look at this as a huge positive for Hulu. We're realistic about Hulu Live in terms of the impact this could have, but Hulu Live is certainly a nice, important feature of our Hulu business, but the critical part of that business is Hulu itself.



HUGH>> Michael, I'll take the question on DTC profitability and double digit. For the first time we put out that our objective is to get to double digit margins. In some ways that probably shouldn't be a surprise to investors, because the goal has always been to build what I would characterize as a good business.

What does a good business look like?

It's got growing subscribers and attractive margins, which we're defining as double digits.

Number two, you'll see some level of pricing.

Both of those things will probably be similar to what you have seen over the last couple of years, maybe a slightly different balance but roughly similar.

And then we'll actually get some leverage out of marketing spend, content and technology spend, all of those will grow a little bit less at a lesser rate than the rate of revenue growth.

In terms of the specifics on how do we get there with subgrowth, I think it will be a couple of things.

Number one, paid sharing is an opportunity for us. It's one that our competitor has obviously taken advantage of and we have got some very specific actions that we're taking in the next couple of m onths, which I discussed earlier, which will benefit us to some degree in the back half of this year and very much next year.

Number two, we'll see lower churn with the bundles that we're looking to put out.

Number three, international remains a growth opportunity for us. So if you put all of those pieces together, it's kind of doing a lot of what we have been doing with maybe some slightly different tactics to get to a level that, again, we would characterize as a good business.

Not going to put a specific time frame on that right now.

Some of that is going to be driven by the marketplace.

Just know that we feel a sense of urgency in getting there and that's probably the way we are going to operate the business.

We'll feel urgency but only to get to a good, sustainable business.
 

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