Disney Posts Mixed Earnings $1.58/share on Rev of $14.24B

[ford91exploder]

If ESPN becomes revenue negative (and ends up looking like it will start accelerating to the downside) I can't seeing it being spun off. No investment bank would dare underwrite it. And if it somehow managed to get an IPO under those conditions I suspect that the folks at 345 Park Avenue would suspect the whole thing is an attempt to financially engineer a way out of fully holding up their end on a binding contract...

But I strongly suspect that if $DIS get's low enough it will find a buyer. Someone out there will think they have the fix for ESPN, or want's the IP and/or the real estate, and would be happy to pick it up at firesale prices. Private equity wouldn't care about quarterly fluctuations since they don't have to report. As I've said, the biggest risk to this 'landing' happening is a macro event that takes out these potential buyers as well...

Though I wonder if the cocktail of high rights fees and much, much lower user income ends up changing the division to one that has to live with Kroger level margins - not remotely good news, but not an existential threat either...

But while I've been focusing on keeping up on my real life investments, I'm thinking more and more about the macro. And this is where we get back to the parks. Who is going to go to the parks in 5-10 years? They seem so focused on the high earner. How many of their guests are in fact, people with lower incomes and higher leverage? Or those who work in a cyclical industry? And never mind how much they try to charge... what about ancillary costs of travel? How much will it cost to fly?

A macro event like DPRK flipping a nuke or two would pretty much shut down international travel instantly, And much of domestic as well.

 

[Amidala]

Correct me if I'm wrong, but isn't Netflix the distributor of the Netflix Marvel series? Doesn't either Marvel Studios or Marvel Television produce the shows? In that case, Disney could acquire the distribution rights either when the series end their run, or when they begin running the new service. This doesn't sound like Sony owning the film rights to Spider-Man, etc.
Again, please correct me if this is inaccurate.

No, I stand corrected! You're 100% right.

One more thing I'll be interested to see play out between Disney and Netflix going forward.

 

[flynnibus]

How many 'apps' is a customer going to want on their screen? And how many charges are they going to be willing to pay? For simplicities sake, the customer may raise the standards of what they want to deal with, so what they choose to subscribe to better have a LOT of content that they want...

No body wants this... but this is what happens when you give in to shortsighted people.

Customers are enthralled with 'free' or cheap per month subscription prices. Of course they are, they are cheap and they think "I will only buy what I want!!". But such packaging can't support the full range of content as they are used to seeing because the money simply isn't there, nor the audience to pitch it as a distribution channel the content provider should pay for.

Meanwhile, people keep supporting small niche services... and overpay because everyone operating on their own has their own overhead to pay vs pooling all that infrastructure/expense.

A future wave of consolidation will happen in the future when the content providers realize they don't want to be in the Internet business.. and a bigger aggregator will come along and sell at a much higher price, or offer 'line item' pricing beyond a minimum price.

 

[Matt_Black]

Disney OTOH is under the misapprehension that their content is compelling, with the exception of college ball it aint.

Are you telling me you wouldn't be interested in all the vault stuff that they don't show anymore?

What I find really funny is all the overinflated sense of outrage at this. "How dare they! This is the kind of thing that leads to internet piracy!" No, you being an entitled cheapskate leads to internet piracy. If you think you're getting overcharged for a luxury (which, guess what, entertainment is) you don't have to buy it.

 

[Nubs70]

Are you telling me you wouldn't be interested in all the vault stuff that they don't show anymore?

What I find really funny is all the overinflated sense of outrage at this. "How dare they! This is the kind of thing that leads to internet piracy!" No, you being an entitled cheapskate leads to internet piracy. If you think you're getting overcharged for a luxury (which, guess what, entertainment is) you don't have to buy it.

Very much interested in vault stuff. However, paying $20/mo for only DIS content, not so much.

 

[Matt_Black]

Very much interested in vault stuff. However, paying $20/mo for only DIS content, not so much.

Again, Disney includes all sorts of television (like The Golden Girls), Lucasfilm, Marvel Studios, Hollywood Pictures, and Touchstone. That is a LOT of varied content.

 

[BlindChow]

You're also forgetting Touchstone and Hollywood Pictures.

If Disney can include Miramax in their new streaming service, that'll be a treasure trove. Basically 365 days of Oscar right there.

 

[ford91exploder]

Are you telling me you wouldn't be interested in all the vault stuff that they don't show anymore?

What I find really funny is all the overinflated sense of outrage at this. "How dare they! This is the kind of thing that leads to internet piracy!" No, you being an entitled cheapskate leads to internet piracy. If you think you're getting overcharged for a luxury (which, guess what, entertainment is) you don't have to buy it.

I'd love to see things like the 'Silly Symphonies' etc and I'd pay a reasonable fee to do so.

My comment was that Disney does not have a single channel that makes the top ten in an ala carte scenario and only ONE in the top 20 at position 18 is ESPN and its behind The Weather Channel at 17

Thats what i mean Disney barely makes a single spot in the top 20 and misses the top 10 entirely. Disney currently has no programming with mass market appeal

 

[Rosso11]

I'm really interested in what the original content is going to be. I think that is going to be the key to the success of this or not. I think in the end they will be smart enough to package Star Wars and Marvel into it. A well made live action Star Wars show alone can almost guarantee success for the service. Disney has so many great ideas they can dust off. Back at D23 in 2009 they announced the partnership with Guillermo Del Toro to create the Double Dare You brand which would have been a little darker and edgier. When I watched Stranger Things I felt a show like that would have been perfect for that brand. The old live action Gargoyles movie they came close to making. Turn it into a TV show set in the Middle Ages and they have their potential family friendly Game of Thrones. Disney needs to have a well rounded product for this to be successfull. I don't think they can simply rely on their past shows and movies. That will only get them so far. It's the original content that has the potential to bring in the masses.

 

[Matt_Black]

The old live action Gargoyles movie they came close to making.

You mean the one with Nicolas Cage attached that would have nothing to do with the show except the name? No, I am GLAD that fell down the deepest Abyss in Developmental Hell.

 

[Rosso11]

You mean the one with Nicolas Cage attached that would have nothing to do with the show except the name? No, I am GLAD that fell down the deepest Abyss in Developmental Hell.

Haha obviously not that version but the potential is there if done right

 

[Matt_Black]

Haha obviously not that version but the potential is there if done right

And by "done right" you mean "written & produced by Greg Weisman".

 

[rael ramone]

I'm really interested in what the original content is going to be. I think that is going to be the key to the success of this or not. I think in the end they will be smart enough to package Star Wars and Marvel into it. A well made live action Star Wars show alone can almost guarantee success for the service. Disney has so many great ideas they can dust off. Back at D23 in 2009 they announced the partnership with Guillermo Del Toro to create the Double Dare You brand which would have been a little darker and edgier. When I watched Stranger Things I felt a show like that would have been perfect for that brand. The old live action Gargoyles movie they came close to making. Turn it into a TV show set in the Middle Ages and they have their potential family friendly Game of Thrones. Disney needs to have a well rounded product for this to be successfull. I don't think they can simply rely on their past shows and movies. That will only get them so far. It's the original content that has the potential to bring in the masses.

There's a good amount of speculation out there of what will and won't be on the 'Disney App'. The Weatherman himself in an interview said they may still sell Marvel & Star Wars films to Netflix still. Would the 'Disney App' just be Disney/Pixar content? Some people may not want anything they deem 'not family friendly' on it. Others may find the content insufficient unless it includes the other content. But a HUGE thing, and one I think current management understands, is that you need to CREATE content (content that currently doesn't exist). A huge section of their audience get's their 'Disney fill' by watching their DVD/BlueRays. You have to give this audience something that they don't already have (but your kid can watch this stuff on his or her phone - oh, wait, you won't let your kid have a phone because they are too young).

Creating compelling new content (and a LOT of it because some stuff won't catch on). And a LOT of spending on new infrastructure. For ESPN at least, it's absolutely necessary even if it hurts (and does a LOT) in the short term (and all for something that will very unlikely deliver the margins they got with the bundle), because they have no choice. The 'Disney App' looks tougher to succeed.

And all of this while doing everything in their power to keep up the stock price. Not just for their personal compensation, but to keep the Ichans & the Ackmans & the Janus's out there for loading up shares. Which does not appear to be good news for the parks and those who like to get the same experience they are used to without having to partake in upcharges...

 

[RSoxNo1]

If Disney can include Miramax in their new streaming service, that'll be a treasure trove. Basically 365 days of Oscar right there.

Plus Kevin Smith movies.

 

[Christian Fronckowiak]

If Disney can include Miramax in their new streaming service, that'll be a treasure trove. Basically 365 days of Oscar right there.

Miramax, and I'm assuming its film library, are now owned by beIN Media Group.

I'm really interested in what the original content is going to be. I think that is going to be the key to the success of this or not. I think in the end they will be smart enough to package Star Wars and Marvel into it. A well made live action Star Wars show alone can almost guarantee success for the service. Disney has so many great ideas they can dust off. Back at D23 in 2009 they announced the partnership with Guillermo Del Toro to create the Double Dare You brand which would have been a little darker and edgier. When I watched Stranger Things I felt a show like that would have been perfect for that brand. The old live action Gargoyles movie they came close to making. Turn it into a TV show set in the Middle Ages and they have their potential family friendly Game of Thrones. Disney needs to have a well rounded product for this to be successfull. I don't think they can simply rely on their past shows and movies. That will only get them so far. It's the original content that has the potential to bring in the masses.

Disney Double Dare You morphed into a co-production deal between del Toro and DreamWorks Animation that produces Trollhunters, ironically for Netflix.

 

[Matt_Black]

Plus Kevin Smith movies.

Miramax, and I'm assuming its film library, are now owned by beIN Media Group.

They MIGHT have access to the Clerks animated series, though, since that was produced for ABC.