by Ray Keating
News/Analysis
DisneyBizJournal.com
July 20, 2020
The Wall Street Journal reported today on an assortment of challenges being faced by the Walt Disney Company due to the extended nature of the coronavirus pandemic.
While the entire article warrants reading, two broad points are worth highlighting.
First, the positives regarding Disney+ were pointed out. That included the fact that subscribers have soared “to more than 50 million since its November launch,” and subscriber turnover has been light. Looking ahead, the Journal pointed to a bold prediction from Goldman Sachs: “A recent analyst report from Goldman Sachs projected Disney+ would have 150 million subscribers by 2025, putting it closer to streaming heavyweights Netflix Inc. and Amazon Prime.” Goldman also has predicted that Disney+ would become profitable during fiscal year 2021, which would be two years earlier than widely assumed.
Second, the news on the theme parks front, however, was decidedly, and not surprisingly, grim. The Journal noted, “Profitability at Disney’s domestic parks may not reach pre-pandemic levels until” 2025, “according to an analyst report from Cowen released last week.” It also was reported that if the shutdown continues, Disney will be forced to “eliminate thousands of jobs,” with theme parks and Imagineering likely to get hit hard.
Finally, one point only hinted at in the article would be the troubles faced by Disney+ in terms of new content. Clearly, production shutdowns have delayed new content expected by viewers from arriving on the streaming service, such as on the Marvel front, and delaying the start of future programming. Even Disney+ with its formidable library needs to produce fresh content. Of course, other studios and streaming services face the same problems, and Disney will be well positioned to get rolling once the pandemic ills have subsided. Until then, uncertainty will persist across Disney’s many enterprises.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels. He can be contacted at raykeating@keatingreports.com.
Also, get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.
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