It's been another quarter for the Walt Disney Company and so it's time for CEO Bob Iger to take the stage and talk about how Disney has done from a financial perspective. On the studio side the last three months have meant big hits like Guardians of the Galaxy Vol. 3 and significant disappointments like the recent Haunted Mansion movie. On the theme park side it will be interesting to see what the financials look like. While recent anecdotal evidence has indicated the parks may not be as full as they usually are, any declines there are likely to be too recent for this conversation.
About 20 minutes before the Q3 call, it will be interesting to see where things go from here. A few pieces of information coming out of the quarterly report: Disney+ hit a subscriber total of $146.1 million, short of the goal of 154.8 million. However, quarterly revenue also came up short at $22.33 billion vs a goal of $22.5 billion. Drop was mostly in linear networks revenue. Revenues and operating income for Parks Experiences and Products were up, though mostly internationally. Walt Disney World did see reduced attendance in the quarter, though Disneyland Resort attendance was up
The hold music before the call starts was just playing the version of "Grim Grinning Ghosts" from the Haunted Mansion movie and I'm still annoyed the soundtrack doesn't include a full version of the song in that style. It's a bop.
The quarterly earnings report includes a statement from Iger that Disney is "on track to exceed our initial goal of $5.5 billion in savings." That savings goal was the reason Disney has laid off 7,000 Cast Members this year, closed the Star Wars: Galactic Starcruiser, and pulled a significant portion of original content from Disney+.
And the call is officially getting underway. Bob Iger will speak first, and it will be interesting to see what topics he decides to cover.
Bob Iger starts by talking about the streamlining of the company, which is to say the significant layoffs, though he's not using that word.
Iger says film, parks, and streaming will be the three biggest businesses for Disney over the next five years. Wants to reduce the number of movies being released, but also reduce costs of production. Avatar: The Way of Water is on the way to being a top home video release in Disney history.
Iger mentions the Avatar experience coming to Disneyland again, but doesn't elaborate any more on what it will be. Iger sings the praises of the success of Disney Parks at Hong Kong and Shanghai. Iger mentions that Florida tourism tax data says Florida tourism overall is down, not just at Walt Disney World
Iger says 3.3 million subscribers are using the ad-supported version. Iger says price increases are coming to Disney+, but an announcement of details will come later. An account-sharing system will be announced to deal with it.
On ESPN: Iger brings up PEN sports betting deal. Ad-revenue for SPN still strong. They are looking at other partnership deals, but Iger is clear that Disney will retain control of ESPN.
Linear Networks: Iger says they will rely on network content for the future. Seemingly walking back comments about possibly selling them off.
Iger on the strike: Sings the praises of creatives and their importance, and says he is committed to personally working to help find a solution to the strikes.
Call has been turned over to Kevin Lansberry, interim CFO following Christine McCarthy stepping down for health reasons. This is a lot of finance stuff that people better than me at math probably understand.
Commercial-free Disney+ will cost $13.99 per month starting Sept 6. AD supported tied will hit Europe and Canada beginning Nov. 1. Hulu without ads going up to $17.99
Lansberry says they expect continued slack in demand at Walt Disney World, due to the end of the 50th anniversary, combined with increased travel costs. DIsney World saw lower attendance and lower merchandise sales, partially offset by increased costs in F&B/tickets.
Disney hopes to see a "modest dividend" at the end of the year. The dividend has been suspended since the pandemic.
Q&A gets started: Question about D+ password sharing. Iger says they have the ability to monitor, and they know password sharing is significant. They think they can grow business if they handle it right.
Regarding Disney movie studio status. Iger calls out Avatar 2 and GOTG 3 as success, but calls other movie performance "disappointing."
On Disney+ price increase, Iger is asked if he thinks customer base will stay with increases. Iger says there was not a major subscription drop following last price increase. ad-supported D+ is being kept flat, because they want subscribers to move from ad-free to ad-supported. Iger implies price strategy would have been very different from the outset if they'd known how it would start.
On ESPN BET: PEN partnership offer was significantly better for Disney than any other offers.
Iger gets asked about the possibility of splitting Disney into two companies (Studio/Parks/D+ as one company) Iger won't answer, simply says they are keeping options open.
Question about the future of Hulu, with next year set as the year that it will come under one owner, either Disney or Comcast. Do they expect to be able to fund that transaction? Landsburry says they have plenty of cash/credit to fund whatever needs to happen.
A question about Disney possibly being sold to "a technology company." Does Iger see that as a possibility? Iger refuses to speculate about Disney being acquired. He does imply the "global regulatory environment" would likely not be very open to such a thing.
That's the end of the call. No major news beyond the Disney+ price increase, but certainly there is a lot going on at Disney and we've only begun to see the results of it all.
