Disney's Streaming Services: Disney+ (and Hulu, ESPN+, Star, & hotstar)

[adam.adbe]

The $8.61B number is wishful thinking on Disney's part.

Key part of the Press Release
"Under the appraisal process agreed to by Disney and Comcast, Hulu’s equity fair value will be assessed as of September 30, 2023, and if the value is ultimately determined to be greater than the guaranteed floor value, Disney will pay NBCU its percentage of the difference between the equity fair value and the guaranteed floor value. While the timing of the appraisal process is uncertain, we anticipate it should be completed during the 2024 calendar year."

I can imagine some people in Philadelphia are laughing right now.

They aren't saying they think that's the price, just that this is what they are guaranteed to pay by December.

 

[MisterPenguin]

Surprise Hulu Hit Gets Renewed for Season 2

Fright Krewe, which debuted on both Hulu and Peacock, is officially returning for more episodes.

comicbook.com

 

[AndyS2992]

The plan was for Disney+ to be profitable Q3 2024. And the have a plan: streamline production, cut costs, lean into ads, license some of their content to other platforms, and probably leverage subscriber information. They'll probably fold Hulu into D+ in some way, too. Less than a year isn't long, though, is it?

In every country outside the US, Hulu content is on Disney+ under it's 'Star' banner so yeah, it would be wise for Disney to close Hulu and absorb it all in to Disney+.

 

[Sirwalterraleigh]

All I want to know is when will D+ start to break even and stop gushing blood...100's of millions of dollars worth...every single quarter...of every year since the day it was born.

The day it actually generates it's VERY FIRST $.001 cent of real profit...will be an amazing day of celebration and rejoice for all of us! Will it be next year,...in 5 years....or never? I dunno....

The plan was for Disney+ to be profitable Q3 2024. And the have a plan: streamline production, cut costs, lean into ads, license some of their content to other platforms, and probably leverage subscriber information. They'll probably fold Hulu into D+ in some way, too. Less than a year isn't long, though, is it?

That’s not a “plan”…it’s a guess

I don't believe it was ever said which quarter in FY24 D+ was to be profitable, just that it would be by the end of FY24.

Also yes its already been announced that Hulu would be merged into D+ as one of its tiles, just like Star is outside the US. It was suppose to be by the end of 2023, but I believe its been pushed back until sometime in spring 2024.

Why 2024 again? I’ll keep asking until someone comes up with a plausible answer?

It’s not subscribers…it’s not costs because that’s gonna continue…
Is it tripling the prices a couple times a decade?

Inquiring minds want to know

 

[Sirwalterraleigh]

In every country outside the US, Hulu content is on Disney+ under it's 'Star' banner so yeah, it would be wise for Disney to close Hulu and absorb it all in to Disney+.

I assume that is the plan…cause selling Hulu alone has not found El dorado

 

[Cliff]

The plan was for Disney+ to be profitable Q3 2024. And the have a plan: streamline production, cut costs, lean into ads, license some of their content to other platforms, and probably leverage subscriber information. They'll probably fold Hulu into D+ in some way, too. Less than a year isn't long, though, is it?

Well?...It's a good thing that Disney had a forecast "plan" for Disney+. Thankfully, it's very rare for any Disney "plan" to go wildly off the rails and miss the mark.

Whew!,...I feel better now.

 

[Sirwalterraleigh]

Well?...It's a good thing that Disney had a forecast plan for Disney+. Thankfully, it's very rare for any Disney plan to go wildly off the rails and miss the mark.

Whew!,...I feel better now.

That “plan” was with lower subscriber numbers…

So does that mean they pay Comcast “per gigabite” to stream D+ over their routers? And therefore no money?

 

[_caleb]

That’s not a “plan”…it’s a guess

Why 2024 again? I’ll keep asking until someone comes up with a plausible answer?

It’s not subscribers…it’s not costs because that’s gonna continue…
Is it tripling the prices a couple times a decade?

Inquiring minds want to know

Of course it’s a plan. When you start a business, it’s expected that the initial setup expenses will outweigh revenue for a period of time. From the beginning, Disney said they were going to pump that sweet theme park money into streaming until they got up and running.

2024 because they started with low prices (to attract subscribers) and little content. Since then, they’ve been cranking out content (of variable quality), raising prices, figuring out the ad tier, promoting it like crazy, and gathering/analyzing tons of user data to find what’s most valuable so they can lean into that.

 

[_caleb]

I assume that is the plan…cause selling Hulu alone has not found El dorado

Hulu has been profitable since 2020 and brings in $2B/yr.

 

[Disney Irish]

That’s not a “plan”…it’s a guess

Why 2024 again? I’ll keep asking until someone comes up with a plausible answer?

It’s not subscribers…it’s not costs because that’s gonna continue…
Is it tripling the prices a couple times a decade?

Inquiring minds want to know

This has been explained ad nauseam in this thread, but here we go again.

Since day one it was always announced that 5 years was the timeline it would take to get to profitability, hence the 2024 date.

The idea was D+ would gain subs over time, plus reduce costs (both operational and content) over time, plus increase prices over time, until profitable in 2024. This was the plan laid out back in 2019 when released.

And they still appear to be on target for that to happen sometime next year.

 

[Indy_UK]

Hulu has been profitable since 2020 and brings in $2B/yr.

Is that all?

 

[Demarke]

Hulu has been profitable since 2020 and brings in $2B/yr.

Yep, it seems to me with all the woes trying to make D+ and ESPN stop hemorrhaging money, perhaps those would be better being folded in as components of Hulu (which people seem to generally like as a service)

 

[Cliff]

This has been explained ad nauseam in this thread, but here we go again.

Since day one it was always announced that 5 years was the timeline it would take to get to profitability, hence the 2024 date.

The idea was D+ would gain subs over time, plus reduce costs (both operational and content) over time, plus increase prices over time, until profitable in 2024. This was the plan laid out back in 2019 when released.

And they still appear to be on target for that to happen sometime next year.

Well?....yes that was the original plan. But 2024 is right around the corner and Disney + is nowhere near breaking even yet. They are "still" losing hundreds and hundreds of millions of dollars every 3 months. And that is with Disney being EXTREMELY creative with it's accounting by shifting money from it's left pocket to it's right pocket and using orher accounting smoke and mirrors.

If Disney has a miraculas D+ turn around in the next few months?...maybe...but I seriously doubt it. I'd bet that we are still several years away from D+ profitability. And what about the BILLIONS already lost since launch day? How long will "that" take to earn back? 20 years?

 

[Disney Irish]

Well?....yes that was the original plan. But 2024 is right around the corner and Disney + is nowhere near breaking even yet. They are "still" losing hundreds and hundreds of millions of dollars every 3 months. And that is with Disney being EXTREMELY creative with it's accounting by shifting money from it's left pocket to it's right pocket and using orher accounting smoke and mirrors.

If Disney has a miraculas D+ turn around in the next few months?...maybe...but I seriously doubt it. I'd bet that we are still several years away from D+ profitability. And what about the BILLIONS already lost since launch day? How long will "that" take to earn back? 20 years?

A lot of the money spent are startup costs, that was always baked into the equation, even Wall St. knew that. That is why it was a 5 year plan to profitability. Also costs spent on content was always going to be part of the studios ecosystem. Unless you think that content is "free" just because it was created in-house, someone has to be paid for the content creation. So no that isn't Disney shifting money, that is how studios work (which most don't realize).

Also there is 11 months left until the end of FY24 for TWDC, basically a year. So they have plenty of time to move to profitability, as they have lost less and less as time has gone on. The FY23Q3 saw a 50% reduction from the year prior. So they've been on a downward trend with costs for well over a year now.

We'll see what the numbers are next week for the most recent quarter that just ended. If things continue how they were going then we'll see even further reduction in costs. So by this time next year they will hopefully be profitable. I know some don't believe it, so we'll just have to wait and see.

 

[Sirwalterraleigh]

2024 because they started with low prices (to attract subscribers) and little content. Since then, they’ve been cranking out content (of variable quality), raising prices, figuring out the ad tier, promoting it like crazy, and gathering/analyzing tons of user data to find what’s most valuable so they can lean into that.

Well…If the plan is “get Disney Elite Premiere for the low introductory rate of $59.99 per month”…it’s a terrible plan. I’ve got some bad news for them

It’s just more evidence of a need for new leadership. Reinventing 1994 cable with ads Isn’t gonna work. The younger (becoming prime) generations will pivot out because it’s not their life experience.

Even combined with Hulu…the money needed from stream will never materialize to replace their old tv model…
…so good luck selling $300 a day DAK tickets

 

[jeanericuser001]

There is a silver lining with this. Universal combined with the tax breaks from the bonds and this new deal they should have enough to make their new theme park even better if they invest properly. No need to cut corners unlike Disney which has repeatedly had to do so. I look forward to seeing if comcast will use this money for that purpose or make the mistake of investing it in stock buybacks or CEO bonuses.

 

[Dranth]

There is a silver lining with this. Universal combined with the tax breaks from the bonds and this new deal they should have enough to make their new theme park even better if they invest properly. No need to cut corners unlike Disney which has repeatedly had to do so. I look forward to seeing if comcast will use this money for that purpose or make the mistake of investing it in stock buybacks or CEO bonuses.

My understanding is they already cut corners based on insiders in the form of a few dropped rides that either got canned or moved to a second phase, I want to say another ride or two got scaled back but I could be misremembering that part. Either way, none of that is unusual when building out a new park or park area.

As for the money, I doubt if any goes to improving EU. At this point the park is what it is. More likely they will use some for stock buy backs, a large chunk for expanding broadband/wireless, a smaller chunk to invest in studio projects, and a little bit in future park projects (think Universal Studios refurbs/replacements as that park needs the most help right now) while the rest will be used to service/pay down the $95 billion in debt they are lugging around.

 

[KeithVH]

I assume that is the plan…cause selling Hulu alone has not found El dorado

 

[BrianLo]

Well?....yes that was the original plan. But 2024 is right around the corner and Disney + is nowhere near breaking even yet. They are "still" losing hundreds and hundreds of millions of dollars every 3 months. And that is with Disney being EXTREMELY creative with it's accounting by shifting money from it's left pocket to it's right pocket and using orher accounting smoke and mirrors.

If Disney has a miraculas D+ turn around in the next few months?...maybe...but I seriously doubt it. I'd bet that we are still several years away from D+ profitability. And what about the BILLIONS already lost since launch day? How long will "that" take to earn back? 20 years?

I mean... it's on a pretty easy to map out trajectory. Represented in Q4'22 to Q2'23 is the 3$ US price hike primarily. We have that repeating again INCLUDING a hike to everywhere else (Canada, Europe, Oceanic-asia). There's actually a not insignificant chance the service is profitable by the end of this year. The end of 2024 is a foregone conclusion.

It costs money to build a streaming service from scratch and Iger made a rather bold move of underpricing the service. In order to rapidly build a subscriber base. Chapek got a little starry-eyed and ramped up content spending a little more than was originally planned. The price hikes were always part of the 5 year plan to profitability.

As to your question about how they recoup the 11-12 billion they 'spent'. Well yes that's 11-12 billion down the drain, but now they fully own a streaming service, twice the size of Hulu, for basically 1/6th the fair market value they are about to pay out for the remaining portion of Hulu.

Building things isn't cheap, but it's actually a far better strategy than simply acquiring. D+ was a great deal when the final price tag is determined.

 

[BrianLo]

Why 2024 again? I’ll keep asking until someone comes up with a plausible answer?

Are you asking why, or actually asking how?

Why is because that's what the company decided and modelled their introductory price model, based on projected subscriber numbers by 2024 and the planned amount of content spend. Both were higher than originally projected, not a bad thing per say, but it caused a steeper bottom.

How they will do it is strictly pricing, just as you alluded. It's much more expensive, though surprisingly still priced at a discount compared to Netflix. Another company that also realized they needed to actually make money. And for the record are doing so now quite well.