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Summary
- The Walt Disney company revealed its December quarter results with Disney+ subscriptions being the major source of revenue during the quarter.
- The company reported that the total paid subscriptions across all its platforms stand at 146 million currently.
- The Disney Parks, Experiences and Products segment took a toll as the pandemic-induced restrictions led to reduced operation.
Entertainment giant Walt Disney Company revealed in its quarterly report that it achieved 95 million Disney+ paid subscriptions as of Jan 2, 2021. Combines with Hulu and ESPN+, Disney now boasts of 146 million total paid subscribers, approximately 60 million shy of Netflix mark.
Thanks to the booming success of its streaming platform, the company has managed to recoup the losses incurred in its other businesses dented by the pandemic.
This marks Disney’s first quarterly profit since the commencement of lockdowns across nations in March last year. The company’s diluted earnings per share decreased by 98% from US$1.17 during the same quarter last year to US$0.02 in this quarter.
Following the announcement regarding its streaming platform, Disney’s shares traded slightly higher at US$190.91 per share. This was an increase of almost 45% in the company’s share price over the past 6 months. The December quarter proved to be a harbinger of good news for Disney as the company saw a significant performance boost.
The impact of Covid-19
Like most businesses Disney also faced its share of hardships during the pandemic despite its wide customer base. Losses poured in through the company’s parks and resort business channels, which suffered due to the social distancing restrictions.
The Disney Parks, Experiences and Products segment saw a reduction in profits of approximately US$2.6 billion. The theme parks, resorts and the cruise ship sailings remained closed for a major part of the year or had to be opened under reduced capacity.
Additionally, the company had to delay or, in some cases, cancel its theatrical releases and stage play performances as well as live sports programming due to lack of the availability of content. However, film and television production resumed by the start of the December quarter.
The above losses come with additional costs related to government regulations and implementation of social distancing conditions, the estimated costs of which are US$1 billion as reported by Disney. Thus, the media business saw an uneven trajectory of profit growth over the past 10 months.
What Caused Disney to “Keep Swimming”
The direct-to-consumer platforms, ESPN+ and Hulu brought in increased average monthly revenue per paid subscriber. Hulu saw an increase of 26% increase in its live TV service customer base. The revenue from the direct-to-consumer business grew 73% compared to the same quarter last year to reach US$3.5 billion.
Disney stated that it now has 146 million total paid subscribers. The company also plans to ramp up the price of its Disney+ streaming service US$7.99 by March.
The parks that have reopened saw increased attendance each day from Q4FY20 to Q1FY21. Things might change for the better in the coming months as themes parks may be allowed to open sooner than previously proposed due to a new legislation introduced by two California Assembly members.
