Walt Disney is raising the prices of its streaming services Disney+ and Hulu by a whopping 27 percent after a series of remakes woke up that disappointed at the box office, and visits to Florida’s Walt Disney World dropped amid the company’s war with Governor Ron DeSantis.
Disney’s third-quarter results, released Wednesday, were mixed.
They beat Wall Street estimates on adjusted earnings per share, and the company said it was on track to cut costs by more than the $5.5 billion it promised investors in February.
But the company missed Wall Street’s revenue targets and fell slightly short of expectations for US Disney+ subscribers, though it has cut its losses significantly.
Chief Executive Bob Iger, who returned for a second stint at the helm of Disney, faces formidable challenges on nearly all fronts of the entertainment empire beyond Wall Street’s mandate to make its streaming business profitable.
It also struggles with an eroding television business and movie box office that has yet to return to pre-COVID levels.
The company has also been bruised by a series of awakening flops at the box office.
The Walt Disney Company is facing significant financial setbacks, with an estimated loss of nearly $900 million following a series of disappointing wake movies
Released a year ago with a reported budget of $200 million, Lightyear grossed a modest $226.7 million in worldwide ticket sales and received a decidedly mixed reception
Under the leadership of current CEO Bob Iger, Disney has followed the progressive path of many other American companies
According to an analysis by Valliant Renegade, which looks at Hollywood’s business and finances, the company’s last eight studio releases have not performed as well as expected.
Guardians of the Galaxy and its most recent project, a live-action version of The Little Mermaid, failed to live up to expectations, while two other recent films, Strange World and Lightyear, were complete failures.
Even in Disney’s valuable archive, old characters have been given progressive makeovers, removing “offensive” imagery from attractions and movies. Some conservatives think the company has gone too far in reinventing the wake.
“An important aspect that we always discuss here, and worth reminding everyone, is that Disney retains exclusive rights to the content after its theatrical release.” Brave renegadea cultural critic on Twitter and YouTube.
Disney no longer licenses content, such as the Marvel Cinematic Universe, to third-party platforms such as Netflix and Amazon and has therefore forfeited billions of dollars in potential revenue.
“The once-envied entertainment company now struggles to make a profit on almost every film released,” the media analyst explains.
“Disney’s inflated budgets for these projects are, on average, much higher than the competition, especially considering that every movie Disney puts out comes with blockbuster production price tags.”
In a statement on Wednesday, Iger referred to Disney undergoing an “unprecedented transformation,” including a restructuring of the company to help it become more efficient and restore creativity.
“In the eight months since my return, these significant changes are driving a more cost-effective, coordinated and streamlined approach to our operations, which has put us on track to exceed our initial goal of $5.5 billion in savings,” said he.
Disputed Disney CEO Bob Iger said Wednesday that the company is facing an “unprecedented transformation.”
Disney said it cut losses on its streaming video services to $512 million in its fiscal third quarter, smaller than the loss of about $1.1 billion a year ago.
It added 800,000 Disney+ subscribers, 100,000 subscribers behind analyst estimates, and lost 12.5 million subscribers to the Disney Hotstar service in India, or nearly a quarter of its subscribers, as it lost the rights to Indian Premiere League cricket matches. gave up.
Disney reported revenue of $22.33 billion for the quarter ended July 1, up 4% from a year ago but below Wall Street’s median estimate of $22.5 billion, according to data from Refinitiv.
It returned earnings per share of $1.03, excluding certain items, beating Wall Street’s forecasts of 95 cents per share.
It was not immediately clear whether the adjusted profit figures were comparably calculated.
The company took $2.65 billion in impairment and restructuring charges in the quarter, reflecting the cost of removing certain content from its streaming services, terminating licensing agreements and $210 million in termination benefits to laid-off employees.
Disney’s traditional television business continued its downturn, with lower revenues and operating income in the company’s broadcast and cable television businesses.
Higher production costs for sports programming, along with lower affiliate revenues, weighed on cable channel performance.
TV revenues for the quarter fell 7% to $6.7 billion, while operating income fell 23% to $1.9 billion.
Disney’s direct-to-consumer business posted a 9% revenue increase to $5.5 billion as average revenue per subscriber increased at Disney+ and Hulu.
Content sales and licensing, the unit that includes movie and television sales, reported a larger operating loss of $243 million in the quarter, compared to a loss of $27 million a year ago.
The quarter included the release of ‘Guardians of the Galaxy Vol. 3,” which underperformed at the box office than last year’s “Doctor Strange in the Multiverse of Madness.”
The most recent quarter also saw the release of the live-action remake of ‘The Little Mermaid’, which disappointed.
Disney’s Parks, Experiences and Products group reported a 13% increase in revenue in the quarter to $8.3 billion and an 11% increase in operating income to $2.4 billion.
The results were aided by the recovery of the Shanghai Disney Resort, which was open for the full quarter compared to the same time a year ago, when COVID-19 forced the park to close all but three days.
The unit had lower operating income in its domestic parks due to declines at the Walt Disney World Resort in Orlando, Florida.
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