Disney's disastrous year

[cranberry]

And as far as those Iphones, apple and samsung have been wailing about how people are using them much longer than they did before. That 2 year replacement cycle they were pushing for is starting to look more like a 5 year replacement cycle for the bottom 2/3rds of the market.

I just recently upgraded my Pixel 2...

 

[nevin]

Other major clues that this is more about ideology...

Paramount+? I thought this was about Disney. Yes, Paramount Global pulled advertising off the service. But so did Comcast, Warner Bros Discovery, and Lions Gate Entertainment - why call out Paramount+, specifically?

Also, Disney et al. pulled their ads around November 17th - about two weeks ago. Exactly where was Disney going to be feeling this pinch so soon? Especially when we note that The Marvels had already had its disappointing opening weekend a week prior to these events.

the whole X thing in there is a little odd. Musk has done everything he can to upset every group that he can and has turned X into a dumpster fire. Of course companies are pulling advertising from X. He keeps picking political fights that no sane businessman would every pick. Not sure why anyone would think Disney pulling dollars from X would be worse for them than staying attached to the Dumpster while the MadHatter continues the tea party, while mixing the tea with his leaf blower. I waffle between thinking X is doomed because of Debt and Musk is playing some super smart game to make everyone think it not his fault when it craters, to just thinking he's absolutely nuts.

 

[Snarf Zagyg]

I mostly agree, but to be fair on some of those points; Star Wars and Indiana Jones had released movies that were pretty meh to me before they were acquired by Disney so its not like that’s Disney’s fault. It’s also entirely likely that I view the older movies differently because I was a child when I saw them and rewatching them now with those wonderful rose-colored lenses of nostalgia make it so much easier to ignore their faults compared to watching the later releases as an adult. So yeah.. I’m just probably not the target audience for a lot of this.

All true.* But I think that the trouble with a lot of the Disney discussion we see on this board is that most of the people here aren't actually discussing Disney as a company, but just Disney as "The Company that makes the certain Nerd Culture content that I like."

It's best to think of Disney as three different companies that are all inter-related.

There is the Disney as content producer (films, DTC (Disney+, Hulu), licensing deals, content sales - which includes movies, etc.).

There is Disney as steward of older legacy media- linear networks ABC, ESPN (and other sports) and associated cable channels.

Finally, there is Disney as owner of the most successful branded "lifestyle/parks" brand (parks, cruises, destinations, vacations). They call them "Experiences."

I'm breaking this out slightly differently than the Q4 earnings, but in Q4, we see the following-

Experiences is the largest part of Disney, in terms of revenues, growth and profits.
Legacy is second-largest part of Disney, It is highly profitable, but is in decline.
Content is actually the smallest part of Disney. It operated at a loss in Q4, given DTC (Disney+) and the movie issues. You can see this once you break out the linear networks from the "Entertainment " category.

So when people talk about Disney struggling (and they have recently), they aren't really talking about the issues that the company faces overall. Here's the real issue-

Experiences is a cash cow. Period. But it also will require additional long-term investment.
Legacy is also a cash cow, but is in decline. They need to do something with these asset. Spin them off for cash? Maybe. The free cash is great, but it's not a viable long-term strategy for the company to continue to hold on to these declining assets.
Content is volatile, but they've put their eggs in the DTC (Disney+, Hulu) basket. This needs to work at this point. If they get this to profitability by Q4 of next year, which is what they are predicting, then it should be a reliable money-maker moving forward. Unfortunately, it appears that DTC is, at least in part, hurting the content sales (movies).

The problem that they have is that they will need further capital expenditures in the near future. And there aren't a lot of great options- the whole is greater than the sum of the parts (with the exception of sum of the legacy parts). The overpay for Fox is hampering their financial options.

What would really help them is if they could get a lot of free and easy money from theatrical releases- but as we've seen recently, that isn't likely to occur.

So what they have done is to try and cut costs, raise prices in certain areas (Disney+), and try to re-think the creative side to move it to profitability.

But if I had to look at just one factor that was responsible for the decline in content, it would be overproduction and oversaturation ... all of which occurred at the same time as the launch of D+ (leading people to assume that they could just watch there things on streaming) along with the decline in the movie industry (along with the strikes). Movies can still succeed (see, e.g., Barbie/Oppenheimer). But Marvel movies used to be an event; when was the last time you felt you had to see an MCU movie in the theater?

 

[Ryujin]

Let us also remember that for very recent releases, the Actors' strike meant that from mid-July to early November, actors could not be part of the marketing push for films.

Yup, I've already mentioned that elsewhere.

 

[nevin]

All true.* But I think that the trouble with a lot of the Disney discussion we see on this board is that most of the people here aren't actually discussing Disney as a company, but just Disney as "The Company that makes the certain Nerd Culture content that I like."

It's best to think of Disney as three different companies that are all inter-related.

There is the Disney as content producer (films, DTC (Disney+, Hulu), licensing deals, content sales - which includes movies, etc.).

There is Disney as steward of older legacy media- linear networks ABC, ESPN (and other sports) and associated cable channels.

Finally, there is Disney as owner of the most successful branded "lifestyle/parks" brand (parks, cruises, destinations, vacations). They call them "Experiences."

I'm breaking this out slightly differently than the Q4 earnings, but in Q4, we see the following-

Experiences is the largest part of Disney, in terms of revenues, growth and profits.
Legacy is second-largest part of Disney, It is highly profitable, but is in decline.
Content is actually the smallest part of Disney. It operated at a loss in Q4, given DTC (Disney+) and the movie issues. You can see this once you break out the linear networks from the "Entertainment " category.

So when people talk about Disney struggling (and they have recently), they aren't really talking about the issues that the company faces overall. Here's the real issue-

Experiences is a cash cow. Period. But it also will require additional long-term investment.
Legacy is also a cash cow, but is in decline. They need to do something with these asset. Spin them off for cash? Maybe. The free cash is great, but it's not a viable long-term strategy for the company to continue to hold on to these declining assets.
Content is volatile, but they've put their eggs in the DTC (Disney+, Hulu) basket. This needs to work at this point. If they get this to profitability by Q4 of next year, which is what they are predicting, then it should be a reliable money-maker moving forward. Unfortunately, it appears that DTC is, at least in part, hurting the content sales (movies).

The problem that they have is that they will need further capital expenditures in the near future. And there aren't a lot of great options- the whole is greater than the sum of the parts (with the exception of sum of the legacy parts). The overpay for Fox is hampering their financial options.

What would really help them is if they could get a lot of free and easy money from theatrical releases- but as we've seen recently, that isn't likely to occur.

So what they have done is to try and cut costs, raise prices in certain areas (Disney+), and try to re-think the creative side to move it to profitability.

But if I had to look at just one factor that was responsible for the decline in content, it would be overproduction and oversaturation ... all of which occurred at the same time as the launch of D+ (leading people to assume that they could just watch there things on streaming) along with the decline in the movie industry (along with the strikes). Movies can still succeed (see, e.g., Barbie/Oppenheimer). But Marvel movies used to be an event; when was the last time you felt you had to see an MCU movie in the theater?

on that subject they launched Disney+ without most of the Disney Vault old movies available. That seemed like a strange move for a company trying create service to compete with Netflix. Disney+ could have been a 100 hour a week time sink if they'd just thrown everything in there and let people watch all the old disney movies, tv show's etc. I

 

[Ryujin]

All true.* But I think that the trouble with a lot of the Disney discussion we see on this board is that most of the people here aren't actually discussing Disney as a company, but just Disney as "The Company that makes the certain Nerd Culture content that I like."

It's best to think of Disney as three different companies that are all inter-related.

There is the Disney as content producer (films, DTC (Disney+, Hulu), licensing deals, content sales - which includes movies, etc.).

There is Disney as steward of older legacy media- linear networks ABC, ESPN (and other sports) and associated cable channels.

Finally, there is Disney as owner of the most successful branded "lifestyle/parks" brand (parks, cruises, destinations, vacations). They call them "Experiences."

I'm breaking this out slightly differently than the Q4 earnings, but in Q4, we see the following-

Experiences is the largest part of Disney, in terms of revenues, growth and profits.
Legacy is second-largest part of Disney, It is highly profitable, but is in decline.
Content is actually the smallest part of Disney. It operated at a loss in Q4, given DTC (Disney+) and the movie issues. You can see this once you break out the linear networks from the "Entertainment " category.

So when people talk about Disney struggling (and they have recently), they aren't really talking about the issues that the company faces overall. Here's the real issue-

Experiences is a cash cow. Period. But it also will require additional long-term investment.
Legacy is also a cash cow, but is in decline. They need to do something with these asset. Spin them off for cash? Maybe. The free cash is great, but it's not a viable long-term strategy for the company to continue to hold on to these declining assets.
Content is volatile, but they've put their eggs in the DTC (Disney+, Hulu) basket. This needs to work at this point. If they get this to profitability by Q4 of next year, which is what they are predicting, then it should be a reliable money-maker moving forward. Unfortunately, it appears that DTC is, at least in part, hurting the content sales (movies).

The problem that they have is that they will need further capital expenditures in the near future. And there aren't a lot of great options- the whole is greater than the sum of the parts (with the exception of sum of the legacy parts). The overpay for Fox is hampering their financial options.

What would really help them is if they could get a lot of free and easy money from theatrical releases- but as we've seen recently, that isn't likely to occur.

So what they have done is to try and cut costs, raise prices in certain areas (Disney+), and try to re-think the creative side to move it to profitability.

But if I had to look at just one factor that was responsible for the decline in content, it would be overproduction and oversaturation ... all of which occurred at the same time as the launch of D+ (leading people to assume that they could just watch there things on streaming) along with the decline in the movie industry (along with the strikes). Movies can still succeed (see, e.g., Barbie/Oppenheimer). But Marvel movies used to be an event; when was the last time you felt you had to see an MCU movie in the theater?

There's also the inter-relatedness of their content creation and Experiences. For example I wonder how many gagillion dollars they've made, at theme parks, because of their inclusion of Star Wars and Marvel content? I know that my young niece is always coming back with pics of her with her favourite comic book characters. Could Disney write off all of that content under the advertising budgets of the theme parks? Given the difference in earnings, quite possibly.

 

[Snarf Zagyg]

There's also the inter-relatedness of their content creation and Experiences. For example I wonder how many gagillion dollars they've made, at theme parks, because of their inclusion of Star Wars and Marvel content? I know that my young niece is always coming back with pics of her with her favourite comic book characters. Could Disney write off all of that content under the advertising budgets of the theme parks? Given the difference in earnings, quite possibly.

The interconnectedness between Experiences and content (and other licensing) means it would be really hard to disentangle all that.

OTOH, linear seems like an easy out. However, it appears that they are trying to hold on to the sports part of the licensing (ESPN) and try to leverage that with streaming. But a lot of the contracts with ESPN and the leagues also benefit from the ABC tie-in ...

I don't envy the position they're in. There's a lot of options, but ... it's not clear what options are good options. Obviously, if content starts tossing off cash again, it would solve a lot of problems, but it doesn't resolve some of the underlying tensions.

 

[nevin]

There's also the inter-relatedness of their content creation and Experiences. For example I wonder how many gagillion dollars they've made, at theme parks, because of their inclusion of Star Wars and Marvel content? I know that my young niece is always coming back with pics of her with her favourite comic book characters. Could Disney write off all of that content under the advertising budgets of the theme parks? Given the difference in earnings, quite possibly.

Well all the studio's have been writing off insane amounts of losses, at the streaming services, the movies, Disney has talked a few times about the fact that the cost to visit a Disney park is prohibitive for most in the US. That is why they are building a new park in Oklahoma of all places. I never thought I'd write that. But from what I've read I feel quite safe in saying that most of the big studio's including disney will have at least a billion, or more, dollars more than normal on their tax write offs to the US govt this year.

 

[Morrus]

11. Dr. Who special failed.

And there we have it! How did it fail? Was it viewership? Nope. Because no one knows, except for the UK numbers, which were record highs. So how did it fail?

Plus an audience appreciation score of 84%. Record viewing figures and high viewer satisfaction sounds like a resounding success to me. It takes some effort to take the available data and twist that into some kind of ‘failure’.

I’d also like to see @Henadic Theologian back that claim up.

 

[Parmandur]

It's a value for the money consideration, not an economic one.

In the grand scheme of things, $15-$20 isn't a lot of money. Most people can afford the price of a ticket. (Many people will drop $1,000 on an iPhone and not even blink).

The issue is whether people want to spend their time and money on something they may not like. (e.g. if you went to two Disney movies and didn't care for them, you are less likely to spend money to see a third one.)

Dude, I haven't been to the movie theatre since 2018, amd at this point kind of doubt I would ho back. A month of Netflix costs less than a single ticket.