Disney's Financial Problems

[iamgroot61]

Disclaimer: I am not an expert in business or online subscription services. That having been said, I have an opinion. LOL! From what I have read D+ is not necessarily not PROFITABLE, but is losing subscribers. Why? Well, maybe it's because they are not introducing enough new content to hold people's interest. These services are fairly competitive now. Acquisition of HULU was probably a smart thing to do and it's my understanding that the two will merge. D+ already has a good mix of content that includes classic Disney products (animated and digital content), Marvel (feature films and pretty much ALL of the content originally produced for Netflix), 20th Century Fox films and TV shows, as well as National Geographic and Disney documentaries. I think Disney was a natural for a streaming service. So back to why they are losing subscribers...I really can only guess. Disney+ has added gobs of Marvel and Star Wars TV series, some great, some good, some stink. After arriving on the scene with a big bang (there was a massive subscribership "explosion" when they launched it because, I think, of good marketing, a great initial deal (what was it, $69/Year?). Now, if you subscribe to the bundle of D+ & Hulu it's $22/Mo or something. Disney, IMHO, needs to stay the course, offer the service at a reasonable price and keep creating quality content. So far, not thrilled with the latest Star Wars installment. On a side note, Disney is not "in trouble" financially. They have many legs to stand on. They just aren't AS profitable as they want to be. Just my .02.

 

[LeighM]

Honestly?

Only a few that hang around “neighborhoods” such as this…

Who can’t separate their life at home in the real world from where they choose to vacation…which are not intertwined to the level their emotions tell them.

The financials are in agreement: Disney is in some serious trouble and Bob is at ground zero

The question is it “transitional”? Or is there something that has or is happening that’s really causing a decay of their place in their market?

If it’s the latter…the lions share of blame (100%) is straight up on Bob.

The price of being a business “dictator”…no one to blame

I think Chapek, being all book sense and no common sense, stepped into a big pile of doo doo within the political arena and that caused more negativity. It goes back to his inability to read the room. He opened that Pandora's Box and I don't know that there was a good way for Iger to get out of it. I think initially the problem was transitional because of covid and Disney fans have never been known for being open to changes. But they entered into a very delicate and high emotion topic where people have very strong opinions. A company like Disney never wants to be thrown into that kind of debate.

Disclaimer: I am not an expert in business or online subscription services. That having been said, I have an opinion. LOL! From what I have read D+ is not necessarily not PROFITABLE, but is losing subscribers. Why? Well, maybe it's because they are not introducing enough new content to hold people's interest. These services are fairly competitive now. Acquisition of HULU was probably a smart thing to do and it's my understanding that the two will merge. D+ already has a good mix of content that includes classic Disney products (animated and digital content), Marvel (feature films and pretty much ALL of the content originally produced for Netflix), 20th Century Fox films and TV shows, as well as National Geographic and Disney documentaries. I think Disney was a natural for a streaming service. So back to why they are losing subscribers...I really can only guess. Disney+ has added gobs of Marvel and Star Wars TV series, some great, some good, some stink. After arriving on the scene with a big bang (there was a massive subscribership "explosion" when they launched it because, I think, of good marketing, a great initial deal (what was it, $69/Year?). Now, if you subscribe to the bundle of D+ & Hulu it's $22/Mo or something. Disney, IMHO, needs to stay the course, offer the service at a reasonable price and keep creating quality content. So far, not thrilled with the latest Star Wars installment. On a side note, Disney is not "in trouble" financially. They have many legs to stand on. They just aren't AS profitable as they want to be. Just my .02.

I think the initial numbers for Disney+ weren't completely "real." By that, I mean they initially offered the 3 year subscription at a very low cost for D23 members. Those numbers decreased after the 3 year contract was over. And soon after Disney+ went live, it was followed by covid when everyone was at home looking for entertainment. Once the world started the path to normality, more people cancelled. So I think the initial subscription numbers were just over inflated by covid. The current day numbers may be more realistic and what they might have always been if not for covid.

 

[Sirwalterraleigh]

Chapek wasn’t around as head long enough to do anything in reality.
Add to that the board had the fix in - obviously - for Iger from the jump.

Chapek was a puppet to take heat for bobs bad policies. Leave it at that

 

[JoeCamel]

Chapek wasn’t around as head long enough to do anything in reality.
Add to that the board had the fix in - obviously - for Iger from the jump.

Chapek was a puppet to take heat for bobs bad policies. Leave it at that

Nope, just long enough to open his big yap. Like the mayhem ads I think......

 

[Nubs70]

I remember when many started bashing Michael Eisner for his changes. Bob Iger left on a high note then covid and Bob Chapek happened. I saw articles questioning whether Iger would be able to keep goodwill considering the decisions he would need to make to save the company. Now many are complaining about Iger (when before they didn't want him to leave) and wanting Eisner to come back lol. I don't really think people would be talking bad about Iger if the world hadn't been changed by covid. I think most corporate leaders are in a newer territory and the rule book might've been thrown out the window. I think that's where Chapek failed the most. He's such a strict numbers man that he couldn't read the room when it came to covid and didn't know how to adjust. I think most people expected Disney to one day charge for FastPass. That writing was on the wall a while ago. But I think they all underestimated the blowback from fans who were already cooped up from covid, under a lot of stress and pressure with kids schooling and working from home, loved ones sick and dying, worried about their job, inflation and then Disney (the happy place for Disney fans) making changes that stress their checking account and making it more difficult to vacation. It was just really bad timing, I think.

Covid was happening and Bob used Chapek as a human shield.

 

[LeighM]

Chapek wasn’t around as head long enough to do anything in reality.
Add to that the board had the fix in - obviously - for Iger from the jump.

Chapek was a puppet to take heat for bobs bad policies. Leave it at that

I think a lot of the blame does lie with the board because it was clear that Chapek wasn't the best type to run a creative company like Disney from the get go. And that's not a bad thing - he might've been great as a Frank Wells to someone else's creative kind. That set up appears to be when Disney thrives with leadership like Walt/Roy, Eisner/Wells. No one person can long term be both numbers and creative. And I speak as someone with absolutely no creativity LOL. I can handle a budget and cost cutting all day long but ask me to put together a pretty flyer and I got nothing I don't know how much of a puppet Chapek was though because a lot of those changes made under his tenure might have actually been his ideas when Iger was in charge. All that said, I'm looking forward to the sequel to Disney Wars lol.

 

[Sirwalterraleigh]

I think a lot of the blame does lie with the board because it was clear that Chapek wasn't the best type to run a creative company like Disney from the get go. And that's not a bad thing - he might've been great as a Frank Wells to someone else's creative kind. That set up appears to be when Disney thrives with leadership like Walt/Roy, Eisner/Wells. No one person can long term be both numbers and creative. And I speak as someone with absolutely no creativity LOL. I can handle a budget and cost cutting all day long but ask me to put together a pretty flyer and I got nothing I don't know how much of a puppet Chapek was though because a lot of those changes made under his tenure might have actually been his ideas when Iger was in charge. All that said, I'm looking forward to the sequel to Disney Wars lol.

Chapek was never gonna run anything

Because Iger wasn’t leaving
Retrace the steps:
Iger hears the doomsday Covid predictions (we know they were there because an idiot babbled to Bob Woodward about it)
Iger fears stock crash and business tanking.
Iger quits with no warning on February 20
World shuts down on March 13
Things stabilized in April-may
Iger spend next 2.5 years trying to maneuver and whining to anyone who’s listening…but he was a has been so nobody listens.
Weasel comes out of hibernation
Weasel fires or removes 90% of Board or exec “co-conspirators” in short order


This would be a full on conspiracy theory on my part with Reynolds wrap…
…if it all didn’t make compete sense:

 

[LeighM]

Chapek was never gonna run anything

Because Iger wasn’t leaving
Retrace the steps:
Iger hears the doomsday Covid predictions (we know they were there because an idiot babbled to Bob Woodward about it)
Iger fears stock crash and business tanking.
Iger quits with no warning on February 20
World shuts down on March 13
Things stabilized in April-may
Iger spend next 2.5 years trying to maneuver and whining to anyone who’s listening…but he was a has been so nobody listens.
Weasel comes out of hibernation
Weasel fires or removes 90% of Board or exec “co-conspirators” in short order


This would be a full on conspiracy theory on my part with Reynolds wrap…
…if it all didn’t make compete sense:

I don't think I can buy into that though. If he was trying to escape the s***show then I doubt he would come back now when Disney is in it's current position. He had to have known it would damage the legacy and reputation he had when he retired - which was on a very big high. I don't see how anyone with any kind of sense would go through all of those hoops you listed only to come back and take a big hit. More than likely, he once had presidential or other political ambitions so he removed himself from Disney. Covid happened and the landscape changed. And as most business leaders I've known, had to sit back on the sidelines watching people ruin all of his work with the stupidest kind of crap. The Scarlet Johannsen debacle with Black Widow, DeSantis, the CFO talking about guest waistlines. It's one thing to take pies to the face because of a bad business decision (the eyesore that was the floating Epcot barges, the made no sense Galactic Starcruiser, etc). Those can be erased in time and written off and spun around as trying something new - anyone good in PR can spin those mistakes in a positive way. But their skill at inserting their foot in mouth the way they were couldn't be PR spun. And it's those types of mistakes that can change the goodwill of fans, which I think is part of what we're seeing. Iger, for all of his mistakes, is too smart for that. He's political. He knows how to charm. He understands the importance of the show. And I honestly think he was having many moments watching the Disney execs in his absence. I'm curious to find out who he finds to replace him since Chapek was such a dud. D'Amaro would be good with the parks and resorts, but the company as a whole? I just don't know. I forgot the name of the man who everyone thought would be his replacement that suddenly left. Maybe entice him back?

 

[Sirwalterraleigh]

I don't think I can buy into that though. If he was trying to escape the s***show then I doubt he would come back now when Disney is in it's current position. He had to have known it would damage the legacy and reputation he had when he retired - which was on a very big high. I don't see how anyone with any kind of sense would go through all of those hoops you listed only to come back and take a big hit. More than likely, he once had presidential or other political ambitions so he removed himself from Disney. Covid happened and the landscape changed. And as most business leaders I've known, had to sit back on the sidelines watching people ruin all of his work with the stupidest kind of crap. The Scarlet Johannsen debacle with Black Widow, DeSantis, the CFO talking about guest waistlines. It's one thing to take pies to the face because of a bad business decision (the eyesore that was the floating Epcot barges, the made no sense Galactic Starcruiser, etc). Those can be erased in time and written off and spun around as trying something new - anyone good in PR can spin those mistakes in a positive way. But their skill at inserting their foot in mouth the way they were couldn't be PR spun. And it's those types of mistakes that can change the goodwill of fans, which I think is part of what we're seeing. Iger, for all of his mistakes, is too smart for that. He's political. He knows how to charm. He understands the importance of the show. And I honestly think he was having many moments watching the Disney execs in his absence. I'm curious to find out who he finds to replace him since Chapek was such a dud. D'Amaro would be good with the parks and resorts, but the company as a whole? I just don't know. I forgot the name of the man who everyone thought would be his replacement that suddenly left. Maybe entice him back?

If there’s one thing we know about Bob…it’s that he believes his own bunk.

I don’t think he ever agreed to comeback to a bleepshow

…his pscyhosis is that he thought all that was needed was for him to be there and people would throw money at it.

It’s his failed philosophy.


Look at it with that “assumption” in place?
Makes a lot of sense

But it’s just a theory that fits what we know. Eventually the truth always comes out

 

[DisAl]

Loosing 15 million customers at Charter / Spectrum can't be helping things.
Probably Spectrum wants to pay half what it is worth, and Disney probably wants twice what it is worth. But you can bet the customer wouldn't see any discount from Spectrum but you could bet the customer would get hit with an increase immediately.

 

[Pirate Magic]

Loosing 15 million customers at Charter / Spectrum can't be helping things.
Probably Spectrum wants to pay half what it is worth, and Disney probably wants twice what it is worth. But you can bet the customer wouldn't see any discount from Spectrum but you could bet the customer would get hit with an increase immediately.

Yes I am one of those customers I called Spectrum and asked for refund for services that I paid for and they are giving me the month of September as credit. Spectrum blames Disney and Disney blames Spectrum I blame both neither has their customers in their minds just greed, Disney because they are in trouble and Spectrum because who they represent. I as the customer I do not like being in the middle, I will give them both a little time, if I don’t get what I want my choice to watch what I want, I will take my business elsewhere and in the end Spectrum will lose. And I hope other Spectrum customers will do the same.

 

[DisneyHead123]

I have said for awhile now that I don't think the numbers for streaming add up. I think companies are getting into this field because they have been forced to by technological change and have no other option, but that doesn't mean there's an easy route to profitability there. Essentially, Disney is being asked to go from "The Disney Channel" (and a few other channels) to a replacement for literally all of cable, while charging a fraction of what people paid for cable. With the added loss of DVD sales and declining theater attendance as people get used to viewing movies at home. I don't think they are "getting in on" this market because they see it as a future cash cow, I think they were forced into this position by a changing landscape / new technology.

I see this going one of a few ways:

1. Disney just "takes the L", as the kids these days say. We're kind of programmed in our capitalist society to think that growth is a necessity and that a sudden drop in profits is the end of everything. But in reality, life often goes on. Disney is not likely to go bankrupt. If they downsize significantly, that's awful for the employees impacted, but Disney as a whole will continue on and get into a growth phase again once the world of streaming stabilizes.

2. The concept of cable re-emerges in some new format via cooperation between streaming companies, who are all struggling with the same issue of profitability. Some kind of over-arching streaming platform emerges that combines the individual players.

3. Disney moves to a la carte pricing on many but not all videos, much like Prime. Shelling out for the Paw Patrol movie once on Prime costs the same as an entire month of unlimited ad free streaming for all of Disney+. You don't need a huge volume of sales, relatively speaking, to make a la carte pricing worthwhile.

4. Disney+ expands beyond movie and tv shows into other digital content (apps, games, music, etc.) Amazon again being a bit of a forerunner here, with Amazon Kids. I think the tricky thing about movie and tv style content is that it's often a one and done, or at best a "two or three" and done. Things were different when you could only watch cable shows at their allotted times, or, if you were lucky, record them on a VCR for later viewing. But now? With any and all content viewable at 3 am, the sheer volume needed to satisfy a viewers entertainment needs is unreal. Games have the benefit of being far more amenable to repeat use. There's a reason they NYTimes games section is blowing up these days.

Just my attempt at crystal ball gazing. But what I don't see is a simple transition to "Oh, ok, now it's 2025 and Disney+ has a steady supply of subscribers willing to pay enough to cover their production costs and make up for their lost DVD / theater sales". Those numbers just don't make sense. A fairly significant reset will need to happen between now an profitability.

 

[Eric Graham]

For some reason, I cannot imagine parents with children paying a la carte for Disney movies. I have nephews and nieces and friends who have families so I get the appeal of Disney +. All of those wonderful movies on one channel. I wonder if that is the largest percentage of their subscriber's: Parents with kids. I'm the only reason in our family we have Disney + because of my love for Disney movies. And I can be a kid at heart, also. Last night we were watching Escape To Witch Mountain. I hadn't watched that movie since I was a kid!

 

[DisneyHead123]

For some reason, I cannot imagine parents with children paying a la carte for Disney movies. I have nephews and nieces and friends who have families so I get the appeal of Disney +. All of those wonderful movies on one channel. I wonder if that is the largest percentage of their subscriber's: Parents with kids. I'm the only reason in our family we have Disney + because of my love for Disney movies. And I can be a kid at heart, also. Last night we were watching Escape To Witch Mountain. I hadn't watched that movie since I was a kid!

I think that families are more likely to be on a budget, but parents are also easily motivated to spend money on their children. If it’s something their kid is really crazy about, parents will want to buy it.

I don’t think that will replace monthly subscriptions. There are 12 months in a year, and I don’t see most families buying 12 movies or tv series a year. But 2-5 things the kiddos are clamoring to see (or old classics mom and dad want the family to watch)? I can absolutely see that.