Disney disappoints despite streaming growth


Profit came out at 597 million dollars, down 46% and very much below expectations, while Disney+ saw its number of subscribers grow by 33% over one year.

Disney avoids for the moment the disaster that plagues Netflix. The number of new subscribers to its video-on-demand platforms continues to climb. It reached 137.7 million at the beginning of April, which represents an annual growth of 33%. But if the latest quarterly results of the number one communication are honorable, they are no less disappointing.

The price of Disney, which has plunged 32% since the start of the year, fell further by more than 3% on Wednesday evening, on the over-the-counter market, after the closing of the New York Stock Exchange. Disney remains one of the values ​​that has fallen the most in four months, among the 30 stocks represented in the Dow Jones index. We know that the multinational is affected by the vagaries of the economy. The risk of a global recession and the erosion of the purchasing power of millions of consumers will weigh on its business.

The Burbank (California) firm announced on Wednesday evening that it had made only 470 million in profits during the first three months of the year. This is almost twice less than during the same period last year. At the same time, Disney’s turnover is soaring, from 15.61 billion dollars at the start of 2021, to 19.25 billion dollars.

We see the result of the tourism boom, made possible by the end of the pandemic. The Disney division, which includes its theme parks and hotels, was swimming in losses due to confinements and travel restrictions in early 2021. It posted $1.76 billion in profits in the first three months of 2022 .

We also note that the political controversy affecting Disney in Florida does not seem to be dissuading thousands of families from coming to Disney World to let their children dream. Bob Chapek, the boss of Disney, has become despite himself the pet peeve of the Republican governor of Florida, and the symbol of the Hollywood boss “woke”, for having belatedly denounced a Florida law prohibiting the teaching of gender theory to young people in public schools.

A $32 billion content budget

Wall Street is very interested in the number of subscribers to Disney +, Hulu and ESPN +, the group’s three major streaming platforms. The 33% gain in the number of subscribers to Disney +, compared to last year, may exceed analysts’ forecasts, it represents a slowdown in view of the growth of the last quarter of 2021.

And above all, the average monthly income paid per subscriber only increased by 9% overall. This key amount is only $4.35 across all global markets. Disney explains it by the relative greater popularity of cheaper subscription plans. On the North American market, the most competitive and wealthiest, the average monthly income per subscriber reached 6.32 dollars, or a gain of 5% over one year.

Disney continues to expect subscriber growth, which is a relief in the context of the reverse forecast made a few weeks ago by Netflix. It is true that Disney, unlike Netflix, has not yet offered Disney+ in all major global markets.

By the end of the second quarter alone, the service will, for example, be offered in 53 new markets. Bob Chapek points out that the arrival of new content, both films and series, should stimulate public interest. But Disney is also counting on cheaper subscription packages that include advertising to maintain the waning growth in the number of its users.

The production of new series and films, essential to fuel the expansion of Disney+, adds to the development costs of this new form of distribution. It contributes to a doubling of the losses of the “direct to consumer” pole which houses streaming. They now reach 887 million dollars. However, the profitability objective for this activity remains September 2024, confirms Bob Chapek.

“We track our content spending very carefully”, he underlines, commenting on the quarterly results of his company. For the whole of 2022, it has already reduced its expenditure forecast for this item by one billion, which will nevertheless still represent a colossal amount of 32 billion dollars, of which roughly a third corresponds to dating broadcasting rights. sports.

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