Disney Earnings Call: “Mulan” Arriving on Sept. 4 as a Disney+ Extra, Disney+ Subscribers Up, Earnings Down

by Ray Keating

Analysis

DisneyBizJournal.com

August 4, 2020

Disney’s earnings report today provided additional information about how hard the COVID-19 pandemic has hit the company, and how much the company is pushing direct-to-consumer (DTC) streaming. That importance of this combination came through loud and clear when Disney CEO Bob Chapek announced that Mulan would be released on September 4 as a premiere access event priced at $29.99 on Disney+.

Disney+ subscribers now top 60.5 million – far exceeding expectations. Disney’s combined streaming subscriber numbers – that is, including Disney+, Hulu and ESPN+ - exceeds 100 million.

As of June 27, 2020, Hulu subscribers came in at 35.5 million and ESPN+ at 8.5 million.

On the earnings front, Disney suffered a loss in third quarter ending June 27, 2020, of $2.61 diluted earnings per share (that is, earnings per share if all convertible securities, including, for example, stock options and warrants, were exercised) compared to income of $0.79 for the prior-year quarter. For the nine months ending June 27, Disney experienced a loss of $1.17 versus income of $5.97 in the prior-year period. After adjusting certain items for comparability, diluted EPS for the latest quarter was down by 94 percent to $0.08 from $1.34 in the prior year.

Obviously, this biggest hit came in the theme parks area, with Disney reporting, “The most significant impact was at the Parks, Experiences and Products segment as most of our theme parks and resorts were closed for the entire quarter and our cruise ship sailings were suspended.” Specifically, it was noted, “Parks, Experiences and Products revenues for the quarter decreased 85% to $1.0 billion, and segment operating results decreased $3.7 billion to a loss of $2.0 billion. Lower operating results for the quarter were due to decreases at both the domestic and international parks and experiences businesses and to a lesser extent, at our merchandise licensing and retail businesses.”

It was clear in Chapek’s comments that the big push at Disney is on the DTC front, especially with Disney+. And while the premiere access of Mulan on Disney+ was called a “one off” by Chapek, he also highlighted this as an opportunity to learn. Indeed, it appeared that Chapek was very interested in pay-per-view offerings on Disney’s own streaming service.

Oh yes, and Bob Iger wasn’t on the call. Chapek was flying solo.

__________

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of thePastor 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.