Disney Doubles Down on Direct-to-Consumer Offerings
Disney Reports Losses and Shares Plans for Recovery
This week Disney (DIS) reported a quarterly loss of almost $5 billion, its first loss in nearly two decades. The ongoing pandemic has battered Disney’s theme park and cruise operations, and movie theater closures have hurt the company’s film distribution revenue. Additionally, the absence of live sports last quarter was detrimental for ESPN, which is owned by Disney. With that said, the dismal quarterly results weren’t as bad as some feared. After analysts expected Disney to report a loss of 64 cents per share, the entertainment conglomerate surprised on the upside by announcing it had actually earned 8 cents per share.
Another major bright spot for the diversified media company was Disney+, its new streaming service. Since Disney+ was launched in November, it has gained over 60 million users. For context, streaming giant Netflix (NFLX) took eight years to garner that many subscribers.
Disney’s newly appointed CEO, Bob Chapek, has unveiled how the company plans to recover from the recent losses. The media conglomerate will leverage the success of Disney+ and find more ways to reach consumers at home, rather than in public spaces, doubling down on its direct-to-consumer offerings.
Mulan Will Debut on Disney+ Next Month
Disney’s streaming offerings include Disney+, ESPN+, and Hulu. Combined, these services have over 100 million paid subscribers globally. Netflix still reigns supreme, with almost 200 million subscribers, but Disney is hot on its heels.
As a way to draw more viewers to Disney+ this fall, Disney will release the live-action remake of its classic cartoon, Mulan. The film was scheduled to debut in theaters this spring, but after several postponements, the movie is now slated to premiere on September 4 as a $30 pay-per-view offering on Disney+. The company has said it is excited about the digital release of Mulan, but it does not anticipate sticking with this model once traditional theaters reopen.
Disney Will Launch a New Streaming Service in 2021
Disney has also announced plans for rolling out a new streaming service focusing on “general entertainment” in 2021. The service will fall under the Star brand, which Disney scooped up as part of its $71.3 billion deal for Fox’s (FOX) entertainment assets in March 2019. Star is a Mumbai-based, Indian TV company which is home to dozens of entertainment and sports channels. Instead of creating original content, the service, which has yet to be named, will offer media from ABC Studios, Fox Television, FX, Freeform, 20th Century Studios, and Searchlight.
Disney, like many companies right now, faces an uncertain future. The company is hoping that revenue from its theme parks and other entities will eventually trickle back. In the meantime it is focusing on streaming, which means viewers stuck at home will have plenty of Disney content to enjoy on the couch.
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