Disney’s Q2 FY23 Earnings Results Webcast

[TP2000]

The point is that they made more money (well, lost less, but same difference)

So they're still losing money on streaming.

despite fewer customers this quarter due to increased sub fees and advertising revenue. Revenue per subscriber was up a decent bit (20% in the US!) which seems more important than a relatively small drop in subscribers.

And... so they're still losing money on streaming. And now with fewer paying customers.

Wall Street generally cares more about revenue/profits than just the number of customers typically.

The power of the free market is one of the most efficient things man has ever created. Disney stock will bounce back within days, perhaps by tomorrow afternoon. But the message the market got today came through to them loud and clear, and they're responding back in real time what they think of it.

 

[Sirwalterraleigh]

No kidding! Great point.

All I know is that streaming never seems to pencil out on my dampened cocktail napkin whenever I try to make the math work. I'm just thrilled that Netflix makes it so easy, a few seconds of work, to cancel and re-subscribe. I re-subscribe for one month to watch the latest season of The Crown and a few other fun things I may find, then cancel and wait another year to re-subscribe for the next season of The Crown.

That can't be the business model Netflix wants, but it's the business model they have.

And so does Disney+. I am sure there are families subscribing for summer vacation and Christmas, then cancelling for six months until school is out again and the summer/holiday blockbusters show up on Disney+. How on earth that makes Burbank any money instead of that same family buying 4 sets of movie tickets two or three times per year, I'll never know!

It was a fairly hollow promise by the bobs

Streaming should be a marketing tool. It’s not a high yield profit product

Paaramount+ was in the news because they declared it a “success” this past week. Driven by original content and notably a certain space franchise that’s on the climb again.

But they did not promise a huge return. Just an asset that compliments.

Very wise

 

[mikejs78]

The power of the free market is one of the most efficient things man has ever created. Disney stock will bounce back within days, perhaps by tomorrow afternoon. But the message the market got today came through to them loud and clear, and they're responding back in real time what they think of it.

Which is beyond stupid, because Wall Street has been saying they don't care about subscribers anymore, they care about profit. Revenue went up and losses went down. That's what Wall Street said they wanted.

 

[TP2000]

Yes...

Optimistically, the boat is sinking slower.

Rational/Pessimist, the boat is still sinking.

Glad I'm not the only one who sees that basic reality.

Also, news radio out of LA this afternoon was still all about the writer's strike getting uglier by the day, and blaming streaming and AI for it all. Messy!

Back to streaming, here's a fresh headline from a few minutes ago that took the optimistic "The boat is sinking slower!" outlook...

Disney’s streaming losses improve even as subscriber numbers decline

Disney is also in the process of laying off thousands of employees under CEO Bob Iger's restructuring plan.

www.cnbc.com

 

[BrianLo]

And... so they're still losing money on streaming. And now with fewer paying customers.

I think the point is they are abandoning a market which REALLY did not make financial sense. If you think D+ domestically does not make sense, do you think paying 3 billion for cricket rights for a market that is handed D+ for literally cents per subscriber tracks? This is also cents per subscriber After advertising.

Unlike much of D+ content (like Star Wars or Marvel), cricket rights are only content for one specific market.

But if they went out and handed out free 12 month codes to citizens on the street in India they could have bolstered their subscriber count by 10 million this quarter and dropped their ARPU to 40 cents... for some reason Wall Street would have rewarded that. That's why this particular reaction doesn't make sense.

It's all a reaction to what is quite frankly an empty number (the HotStar Subscriber count), one which Chapek rode up and came crashing down on. Disney Core subscribers are still steady or rising and those are the only ones who will actually make DTC a viable business in the moderate term. WallStreet promised they now cared about profitability, but I guess don't actually.

 

[GhostHost1000]

I'm GUESSING that Hulu Live can't be integrated.

But nobody has Hulu Live besides me, so.

I have it. I hope they integrate it all

 

[Slpy3270]

Probably the one positive about the $1.5 billion-$1.8 billion figure is that it's (for now) less than the $3.5 billion in content WBD wrote off, so I don't think the purge will be as expansive as that was.

 

[Sirwalterraleigh]

The power of the free market is one of the most efficient things man has ever created. Disney stock will bounce back within days, perhaps by tomorrow afternoon. But the message the market got today came through to them loud and clear, and they're responding back in real time what they think of it.

What are you, a Medici

The modern “free market” is all a high stakes gambling show of “confidence”…layered with patronage and insider tips behind the scene.

I love your optimism though, Gord-o!!

Which is beyond stupid, because Wall Street has been saying they don't care about subscribers anymore, they care about profit. Revenue went up and losses went down. That's what Wall Street said they wanted.

I think they’ve seen behind the curtain and they’re not really buying

 

[BlakeW39]

So they’re trying to combine all the services to “save cost and meet guest demands”?

Thad looks an awful lot like a cable bundle

And we students of history need to remind that a big reason cord cutting intensified was because of decades of detestation of forced bundles

preach...one of the reasons you're among my favorite posters here.

TWDC should at least pretend like it isn't trying to screw its costumers. Keep in mind we don't need TV as much as we did in the past. There are other entertainment options via the internet. So they're already kind of on thin ice by my approximations.

 

[TheMaxRebo]

Which is beyond stupid, because Wall Street has been saying they don't care about subscribers anymore, they care about profit. Revenue went up and losses went down. That's what Wall Street said they wanted.

I think during the pandemic investors were looking for any positive signs and latched on to streaming as it was something people were doing when on lockdown, etc ... and it drastically overvalued it - so Disney (and others) stock was kept afloat and boosted by that ... and now we are just seeing the normalization of the stock price to (start to) reflect the true value of it and it will level off over time

so even if the specifics are more related to what Wall St said they wanted, they / the system is still looking to mark down the value that was incorrectly boosted from it in the stock price

 

[GhostHost1000]

So they’re trying to combine all the services to “save cost and meet guest demands”?

Thad looks an awful lot like a cable bundle

And we students of history need to remind that a big reason cord cutting intensified was because of decades of detestation of forced bundles

Soon they’ll be wanting to bundle phone and internet too lol

 

[BrianLo]

Did everyone know HotStar was also licensing all HBO content as well? What kind of a charity was Chapek running in India?

I'm starting to wonder if their DTC losses were mostly driven by India.

 

[Sirwalterraleigh]

Soon they’ll be wanting to bundle phone and internet too lol

If that means they’ll build the largest park development since DAK?

…I’m all for it

 

[GhostHost1000]

If that means they’ll build the largest park development since DAK?

…I’m all for it

“All I can give ya is a new popcorn bucket and cupcake”

 

[Sirwalterraleigh]

Did everyone know HotStar was also licensing all HBO content as well? What kind of a charity was Chapek running in India?

I'm starting to wonder if their DTC losses were mostly driven by India.

Or there just was never that much “there” there and a pied piper in a nametag told you otherwise?

 

[Slpy3270]

Iger says Disney will be "surgical" on deciding which content gets pulled from streaming services.

Seems like they're trying to tell creatives "No, we're not going Zaslav's route." Whether that's true remains to be soon.

That said, I wouldn't be shocked if the majority of content getting pulled are shows or movies Disney doesn't actually own (Diary of a Future President, the Animaniacs reboot, The Right Stuff and the like).

 

[Sirwalterraleigh]

The point is that they made more money (well, lost less, but same difference) despite fewer customers this quarter due to increased sub fees and advertising revenue. Revenue per subscriber was up a decent bit (20% in the US!) which seems more important than a relatively small drop in subscribers.

Wall Street generally cares more about revenue/profits than just the number of customers typically.

The simple take is the market isn’t viewing customer loss as a path to sustained increased profits

Which means in makes sense…for once

 

[TheMaxRebo]

Soon they’ll be wanting to bundle phone and internet too lol

Get D+, your phone, internet, Genie+, and My Pal Mickey services all for one low(ish) price!

 

[Rteetz]

Focusing on parks, WDW was down in Q2 and seemingly will be soft in Q3. MK just opened a new “e-ticket” attraction yet it doesn’t seem to be a draw for people.

 

[TheMaxRebo]

Definitely more signs that bookings are soft

Feels more and more like last year was the last bits of "revenge travel" and people got it out of their system