Disney’s Q2 FY23 Earnings Results Webcast

[CastAStone]

Less content can't possibly equal more subs.

Maybe you can say "we identified what does and doesn't work" so that less content doesn't equal FEWER subs, but I'm not sure how it's supposed to mean more.

It can if, while there’s less content overall, there’s more of the good content.

If I have a 10oz fruit salad that’s mostly melon for $8 and people only want strawberries and blueberries, theyre mostly not going to buy it. If I have a 6oz fruit salad that’s all strawberries and blueberries for $8 they just might, even though it’s a lot less food for the same price.

 

[CaptainAmerica]

If I have a 10oz fruit salad that’s mostly melon for $8 and people only want strawberries and blueberries, theyre mostly not going to buy it. If I have a 6oz fruit salad that’s all strawberries and blueberries for $8 they just might, even though it’s a lot less food for the same price.

I haven't read or heard anything that would indicate they're increasing strawberries and blueberries, they're only reducing melon.

If the 10oz fruit salad had 4oz strawberries and blueberries, and the 6oz fruit salad also had 4oz strawberries and blueberries, you're not going to gain anybody just because you cut 4oz of melon. The ratio has improved but there were no incremental strawberries and blueberries. Oh and it's not $8 anymore, now it's $10.

 

[Jrb1979]

10-Q is up!

Highlights!

Domestic hotel occupancy

Domestic Hotel Occupancy	2019	2020	2021	2022	2023
Q2 (Jan-Mar)		77%	35%	84%	89%
Q3 (Apr-Jun)		0%	50%	90%
Q4 (Jul-Sep)		~5%	~55%	~82%
Q1 (Oct-Dec)	92%	28%	73%	88%

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Every part of the parks and resorts division is doing well. Resorts and vacations is Disney hotels plus cruises plus ABD
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Linear networks are getting clobbered, I can’t recall ever seeing it this bad. It will be interesting to see in the future when ESPN gets broken out of this.
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Is Hulu developing a viewership problem? See footnote:
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OTOH, Hulu remains their only profitable DTC, if I’m reading this correctly.


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Anyway good week to be Josh D’Amaro. To me, these parks results look great and are driving the company.

Driving the company for now. Judging by everything they have announced tells me the unprecedented demand and those high occupancy numbers are going to be much lower.

 

[CastAStone]

I haven't read or heard anything that would indicate they're increasing strawberries and blueberries, they're only reducing melon.

If the 10oz fruit salad had 4oz strawberries and blueberries, and the 6oz fruit salad also had 4oz strawberries and blueberries, you're not going to gain anybody just because you cut 4oz of melon. The ratio has improved but there were no incremental strawberries and blueberries. Oh and it's not $8 anymore, now it's $10.

If that is in fact what they do than that is stupid, I agree. Presumably they’re not that stupid. I guess we’ll see.

 

[Trauma]

I don’t even like salads that much.

 

[hopemax]

Less content can't possibly equal more subs.

Maybe you can say "we identified what does and doesn't work" so that less content doesn't equal FEWER subs, but I'm not sure how it's supposed to mean more.

Given the current climate there are those that claim and believe Disney would gain subs if they eliminated woke content.

Not that is what is happening, but it is an example of how the simple presence of something acts as a turnoff. I kind of feel that way about reality tv. I have no interest in Discovery+ because the amount of reality tv programming. There is probably good history and nature content I would be interested in, but I’m not going to dig through haystacks to find it. Somewhat based on my annoyance levels when watching DH trying to scroll through these menu interfaces to find the show he wants and knows the title. Then after time wasting to start the show, if the show turns out to be bad…I just want to avoid it altogether.

It may not make sense but I can see how better curation would make it easier to discover worthwhile existing content. Take a restaurant, two people can have entirely different perspectives on the quality because one ordered a fish that was and another ordered a pasta they thought sounded good but was rubbery and bland. Even if you were to make no other menu changes, eliminating the pasta and therefore directing pasta orderers to more satisfying dishes can increase satisfaction, change a one-and-done to a repeat customer, and drive recommendations.

 

[JD80]

Most people either don't care or don't think about content. They'll just watch what they find interesting. If they aren't interested in what D+ offers then they won't download the platform. I assume now that Disney has a pretty good idea what people watch and what people sign up to watch.

 

[HauntedPirate]

Call me when the stock hits $60/share. Until then, it's over-valued, IMHO.

Did anyone ever figure out more concretely where the increase in park attendance came from? I read one place it was WDW, and another said it was from DL.

And attendance up 7% but PGS up only 2%? Come on, Bob and Josh, you gotta squeeze harder!

 

[Tha Realest]

Will we cross the Chapek Line*?

*DIS closed at $91.80 the Friday before his dismissal

It’s below the line now. $91.52.

 

[Trauma]

It’s below the line now. $91.52.

I figured the stock would at least bounce a bit today after yesterday.

Nope.

Not a great sign.

 

[donsullivan]

 

[Trauma]

A lot of the comments on that tweet seem very anti Disney to my surprise.

 

[donsullivan]

A lot of the comments on that tweet seem very anti Disney to my surprise.

A lot of the comments on this entire board are pretty anti-Disney as well, so I'm not surprised by that.

As for the comments to the Tweet, they are the same tribal, uninformed 'talking points' without knowledge or a desire to obtain knowledge of the actual facts of the situation.

 

[CaptainAmerica]

Did anyone ever figure out more concretely where the increase in park attendance came from? I read one place it was WDW, and another said it was from DL.

Both.

World had favorable attendance and room nights.

Disneyland had favorable attendance and PGCS.

Both had unfavorable costs.

Cruise Line was the main driver of the segment.

 

[HauntedPirate]

Both.

World had favorable attendance and room nights.

Disneyland had favorable attendance and PGCS.

Both had unfavorable costs.

Cruise Line was the main driver of the segment.

 

[TP2000]

Less content can't possibly equal more subs.

How about "Less content at the same time we raise prices"? Would that increase subscribers?

Disney CEO Bob Iger says more price hikes coming to streaming services amid profitability push

Disney CEO Bob Iger revealed more price hikes will be coming to its streaming services.

finance.yahoo.com

 

[flynnibus]

Disney is forging through the tough transition period where legacy distribution is finally being killed off. This will be a bloody period no matter how well or not they are managing the transition.

My question is... do you think they are winning? Are they better or worse than their legacy broadcast peers? Does anyone think Warner, Comcast, or Paramount are doing BETTER at crossing this chasm?

Inevitable not all will survive the transition - does anyone think Disney won't?

 

[TP2000]

Market is less than 2 hours away from closing now for the week. They're putting a finer point on yesterdays 9% drop by going another 1% lower today.

 

[Nubs70]

I don’t see the cognitive dissonance. Disney said “we spent a lot of money on a lot of different stuff to see what would work in streaming, we successfully identified what does and doesn’t work, and now we’re not going to spend money on the stuff that didn’t work anymore”. That’s literally how a business should operate.

He’s right about linear though.

The conflict arises in that the stock price is based on future expectations. For instance, the Indian market was expected to grow from the existing 6MM subscribers to somewhere south of the 2B persons available. Now with the pullout, the hundreds of millions of subscriptions will never materialize thus the growth expectation is lost. The stock price will drop based on lost expectation.

At a P/E of 40, the stock is overpriced even at its current state. Stock should be at around $45.50

 

[TP2000]

The conflict arises in that the stock price is based on future expectations. For instance, the Indian market was expected to grow from the existing 6MM subscribers to somewhere south of the 2B persons available. Now with the pullout, the hundreds of millions of subscriptions will never materialize thus the growth expectation is lost. The stock price will drop based on lost expectation.

I just Googled, and as of 2022 there are only 22 Million Smart TV's in India, with a population of 1.4 Billion. For comparison, there are 120 Million Smart TV's in use in the USA today, with a population of 330 Million.

Put another way, there is one Smart TV for every 3 Americans, and one Smart TV for every 64 Indians.

That's an Indian Smart TV market and Middle Class demographic still in its infancy, even if you are only charging 60 cents a month.

India has a current GDP per capita of $2,256 per person, versus the USA's GDP per capita of $70,248.

It would seem that Disney got ahead of themselves trying to capture a weak and small Middle Class in India that is still in its infancy, and apparently more passionate about Cricket than Mickey Mouse.