Disney reports strong third quarter earnings, mixed messages on streaming business

The hype about the value of streaming video services seems to be waning as there are so many different options in the market and the competition is so fierce.Warner Bros. Discovery said in its earnings call on Aug. 1 that the value of being a diverse media company and how Walt Disney
DIS
The company reported earnings on August 10, with CEO and Director Bob Chapek highlighting all of the assets it owns.

“Our results demonstrate the ability of The Walt Disney Company’s unique and diverse businesses to strengthen our ecosystem and explore growth opportunities across industries and distribution channels,” said Chapek. I’m here. “And I’m pleased to say that our creative engine is firing on all cylinders, across all areas of franchises, general entertainment and sports,” he continued.

They also delivered mixed messages about their streaming business. was.

However, if you add ESPN+ and Hulu, the streaming service now has over 221 million subscribers, surpassing Netflix.
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first time. Meanwhile, they increased their projections for the fiscal year ending September 2024 to a range of 215 million to 245 million from the 230 million to 260 million range for previous Disney+ and Disney+ Hotstars. I pulled it down.

The company previously announced price increases for ESPN+ starting August 23rd. More news about price increases.

The fact that the company introduced a significant price increase to ESPN+ and didn’t experience a large number of cancellations encouraged management to extend the price increase to other streaming services. “It’s enough to see the recent massive increase on ESPN, which has had the exact same impact on our churn as having no meaningful impact at all. And there’s still plenty of price value left I believe we are,” said Chapek.

Starting October 10th, ad-free Hulu will go from $6.99/month to $7.99/month. Alternatively, you can choose to pay annually to increase your annual rate from $69.99 to $79.99.

Starting December 8th, an ad-supported version of Disney+ will debut at a price of $7.99, while ad-free Disney+ will go from $7.99 per month to $10.99 per month, and the annual subscription price will rise from $79.99 to $109.99. is at the forefront of

“We have a deliberately limited approach, which means we launch with a lower ad load and a lower frequency than, say, Hulu,” said Christine McCarthy, EVP & CFO.
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“But thanks to its disciplined low ad load, low frequency and strong ad demand, Disney+’s latest prepayment translates into industry-leading CPM rates,” she continued.

“It is clear that our unparalleled portfolio continues to be highly sought after by advertisers. We are in a strong position with significant up-front advertising commitments.”

Rising prices can go hand-in-hand with spending on content. Mr Chapek said: For example, in addition to fostering engagement among the tens of millions of existing Marvel fans, the episodic format has seen viewership grow with each new original of his Marvel series on Disney+, and the service has seen an uptick in viewership ever since. is getting new subscribers who have never been involved with Marvel content. This allows you to explore new characters and genres. ”

Overall, we had a great quarter with third quarter revenues up 26% to $21.5 billion, segment op profit up 50% to $3.6 billion and net income from continuing operations up 53% to $1.4 billion. . Investors responded favorably, and DIS’s share price rose 4.6% (+$5.16) to $117.69 on August 11.