Disney’s Q3 FY23 Earnings Results Webcast

[JoeCamel]

It’s just the beginning

They’ve given ZERO indication that this steaming thing is really working from a profitability standpoint.

Really none. They say “we’ll make money in 2024”

Not because the numbers work…because Bob thinks there’s no price that’s too much.

So nobody asked about succession?

 

[mikejs78]

I’m so disappointed by todays announcement, I currently have the $14 D+ (no ads), Hulu (w/ ads), ESPN+ bundle… I don’t watch a ton of Hulu so the ads don’t bother me too much but I don’t want them on D+… the closest option is now $25.

I knew it would go up but I was expecting a couple dollars, not $11. I‘m glad I have a few more months on my current contract to decide, I’m honestly 50/50 whether to renew or just drop the whole thing.

I’m having déjà-vu from cable back in the day, you originally paid for it to not have ads, then they added a few ads “to keep the price low”, now you pay a couple hundred dollars a month and half the time is ads.

Do you watch ESPN+?

 

[Basil of Baker Street]

I’ll look at the breakout…

But…there is still no indication that this thing is ever gonna turn the corner

A lot of US subscribers are on grandfathered deals too.

Expect a 5,000,000 loss every quarter if you want to be realistic


And I’ll stand Pat with casual viewers not paying $25…$30 for a steam with slashed new content and ad tiers

I’ll bet you on that one until they kill me and take this hill

Are subscribers still tied cell contracts? If so is it never ending or I wonder what % would renew out of pocket when it expires.

 

[BrianLo]

The revenue miss is pretty concerning, though.

And I expect the results in November are going to look awful, especially since that's when Indy 5 and Haunted Mansion start to affect results.

Good news, Indy was actually included in this quarter;

'Lower theatrical distribution results reflected the performance of Doctor Strange In the Multiverse of Madness in the prior-year quarter compared to Guardians of the Galaxy Vol. 3, in the current quarter and marketing costs for Indiana Jones and the Dial of Destiny, which was released in most territories in the last few days of June. The current quarter also included the release of Elemental and The Little Mermaid, while the prior-year quarter included the release of Lightyear.'

The CFO also dryly stated they expect TV/SVOD loses of 100 million worse on Q42023 versus 2022. So a loss of ultimately about 275 million is expected the next quarter. Not D+ numbers, but not great.

Cruise line occupancy for Q4 is 98%

Holy .

Not to take away from it, but cruise lines report occupancy in terms of double occupancy. It's a bit of a mental hurdle, but they actually target occupancy above 100%. I think NCL and RCL both reported around 105% occupancy on their results. Unlike hotels that only report in terms of rooms occupied.

 

[Sirwalterraleigh]

Are subscribers still tied cell contracts? If so is it never ending or I wonder what % would renew out of pocket when it expires.

That’s what I’m trying to figure out

Is Verizon writing Disney a check “indefinitely”?

What’s your gut tell you…

 

[Sharon&Susan]

Is there a detailed explanation on how Disney was able to dramatically decrease streaming losses this quarter?

 

[Sirwalterraleigh]

So nobody asked about succession?

The emperor has you beheaded for that

 

[Sirwalterraleigh]

Is there a detailed explanation on how Disney was able to dramatically decrease streaming losses this quarter?

I’m interested in that too…since it’s highly suspect

perhaps because not a frame of film was shot due to the strikes?

 

[Basil of Baker Street]

Is there a detailed explanation on how Disney was able to dramatically decrease streaming losses this quarter?

I'm thinking a large chunk was cutting content production. If you're not making a series that costs 200M for 5 episodes, you just cut your loses by 200m

 

[TrainsOfDisney]

perhaps because not a frame of film was shot due to the strikes?

That was my thought…. But then that wasn’t a planned cut so it seems odd to just count that as a win to investors.

 

[wtyy21]

"""Successful""" 50th Anniversary!

WDW's 50th anniversary was flop/failure. Iger doesn't know how disappointing the 50th anniversary was for the audience, especially when the celebration were compare to pre-Fantasmic fire Disney's 100th anniversary at Disneyland.

They debuted Enchantment, Harmonious, and Kitetails as part of the celebration, all of these entertainment offerings were disappointed except for Beacons of Magic, even when Walt segment was added to Enchantment in August 2022. It happens because the show are all nothing to do with 50th anniversary, especially Disney Enchantment.

Interestingly, Iger didn't mentioned Fantasmic fire at Disneyland during Disney100 celebration and it's aftermath, because there's a reason for Iger to avoid mentioning negative incidents at the parks that would make investors angry about it.

 

[Vegas Disney Fan]

Do you watch ESPN+?

Yes, I got the bundle for the NHL, thats the only reason I have Hulu and ESPN though. It was cheaper to have ESPN and a VPN than the high level cable package required to get the games I wanted, I doubt that’ll be the case anymore.

I’ve dreamed of a la carte TV for years (so I could just get what I want) and now that it’s here cable suddenly seems like a really good deal.

I’m as big a Disney fan as anyone I know, and have a lot of disposable income… if I’m struggling to justify the price I suspect D+ subscriptions will collapse as soon as the huge price increases happen.

 

[Sirwalterraleigh]

That was my thought…. But then that wasn’t a planned cut so it seems odd to just count that as a win to investors.

They’re kinda desperate…I haven’t had time to look through everything…but these numbers in the overall economic climate suck.

 

[Sirwalterraleigh]

Yes, I got the bundle for the NHL, thats the only reason I have Hulu and ESPN though. It was cheaper to have ESPN and a VPN than the high level cable package required to get the games I wanted, I doubt that’ll be the case anymore.

I’ve dreamed of a la carte TV for years (so I could just get what I want) and now that it’s here cable suddenly seems like a really good deal.

Yep. I watch so little on broadcast espn that it’s down to maybe 20 hours a year…including games

I get + for Erik karlssons flying circus. And cancel if I’m busy or nothing it happening.

I’m as big a Disney fan as anyone I know, and have a lot of disposable income… if I’m struggling to justify the price I suspect D+ subscriptions will collapse as soon as the huge price increases happen.

It’s odd…but same boat. I have to feel alot of gen X feels the same way?

A regular thing I hear now is how tedious it is to juggle streams…and it’s been low cost to this point.

Just cancelled hbo max again today and peacock last week…

With the strikes there’s literally no point at all.

 

[Sirwalterraleigh]

Cruise line occupancy for Q4 is 98%

Holy .

Problem is you can fit Disneys entire fleet in your bathtub

That’s why they never “lose” there

 

[BrianLo]

I'm pretty surprised by the price increase, I thought it was going to be a dollar. I've been saying for the better part of a year now Iger's D+ playbook would be the Parks playbook. There was a LOT of runway on pricing, but they really got to the terminus quite quickly.

I do think DTC turns neutral/positive in Q1 '24 with a large shift in Q2 '24 to reasonable profitability. Domestic mostly driving Q1 and then the residual domestic play with the large international shift in play. MOST of the recent billion dollar improvement was all driven by the domestic price hike. International markets (+domestically Canada) all did not experience a real price increase last year since we experienced that quite remotely with the Star rollout.

It's not lost of me that those who evaded the last price increase by signing up for a year just prior to December 2022 will have their plan expire after the October 2023 increase.

 

[BrianLo]

I’m as big a Disney fan as anyone I know, and have a lot of disposable income… if I’m struggling to justify the price I suspect D+ subscriptions will collapse as soon as the huge price increases happen.

I think it's important to reiterate they already price tested this market last December and it really didn't move the subscriber needle. I'm sure there will be some loss since this is a second consecutive blow, but like on order of ~2%. Domestic has slipped 0.6% on the last increase for reference.

They really want to shift more people to ad-tier, I think that speaks to how much money there is in ads. The new spread makes a more convincing argument to the consumer.

 

[Sirwalterraleigh]

I'm pretty surprised by the price increase, I thought it was going to be a dollar. I've been saying for the better part of a year now Iger's D+ playbook would be the Parks playbook. There was a LOT of runway on pricing, but they really got to the terminus quite quickly.

I do think DTC turns neutral/positive in Q1 '24 with a large shift in Q2 '24 to reasonable profitability. Domestic mostly driving Q1 and then the residual domestic play with the large international shift in play. MOST of the recent billion dollar improvement was all driven by the domestic price hike. International markets (+domestically Canada) all did not experience a real price increase last year since we experienced that quite remotely with the Star rollout.

It's not lost of me that those who evaded the last price increase by signing up for a year just prior to December 2022 will have their plan expire after the October 2023 increase.

See I think there’s almost zero runway on stream pricing…because they’re trying to get the same sweetheart deal they had from 1999 cable and it won’t work

Parks pricing was fine…as long as you don’t get labeled a ripoff

…stay tuned there too.

 

[TrainsOfDisney]

I think it's important to reiterate they already price tested this market last December and it really didn't move the subscriber needle. I'm sure there will be some loss since this is a second consecutive blow, but like on order of ~2%.

Not really… they told us the price was going up and to buy before it went up. So this isn’t 2 in a row, this is the first price hike for long term subscribers.

 

[BrianLo]

See I think there’s almost zero runway on stream pricing…because they’re trying tj get the same sweetheart deal they had from 1999 cable and it won’t work

Parks pricing was fine…as long as you don’t get labeled a ripoff

…stay tuned there too.

I'm comparing the runway to Netflix, which was already priced at 20 dollars/month on the top end domestically. 15.99 if we want to just stick to the "standard" plan.

Whether there is more runway beyond that is another matter, but Netflix has achieved adequate profitability right now and Iger is rushing to that goal-line. From 7.99 to 13.99 in less than 365 days. Park tickets have never experienced that kind of 'inflation'.