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Disney post mixed results and will raise subscription prices

Here are the key takeaways from Disney’s quarterly earnings call
Here are the key takeaways from Disney’s quarterly earnings call Copyright Richard Drew/AP
Copyright Richard Drew/AP
By Euronews with Agencies
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Here are the key takeaways from Disney’s quarterly earnings call


Disney has posted mixed results for its fiscal third quarter ended 1 July, which has been plagued with ongoing streaming woes and massive restructuring costs.

The company reported a substantial net loss while shedding customers in both domestic and international markets.

While Disney reported narrower losses on Disney+ in the quarter, the service lost domestic subscribers in the US and Canada for the second straight quarter. Internationally, it racked up its third straight quarter of declines, although issues in the Indian market played a large role there.

The service had 146.1 million international customers in its third quarter, a 7.4% decline from the 157.8 million it reported in the second quarter. That followed a loss of 4 million streaming subscribers in the second quarter. Domestically, it shed 300,000 subscribers in the third quarter, the same number it lost in the second quarter.

Disney recorded $2.65 billion in one-time charges and impairments, dragging the company to a rare quarterly net loss. Disney swung to a net loss of $460 million, or 25 cents per share, for the quarter ended 1 July from a net income of $1.41 billion, or 77 cents per share, during the year-ago period. Excluding those impairments, the company earned an adjusted $1.03 per share.

Revenue increased 4% to $22.33 billion, just short of Wall Street estimates of $22.5 billion.

Streaming price hike and reduced releases

Walt Disney Co. CEO Bob Iger spoke following Disney’s release of earnings for its fiscal third quarter. He vowed to make its streaming services profitable via a planned October price hike on its ad-free Disney+ and Hulu plans and a crackdown on password sharing expected to extend through next year, as streaming rival Netflix did earlier this year.

“Moving forward, I believe three businesses will drive the greatest growth and value creation over the next five years,” CEO Bob Iger said on the company’s earnings call. “They are our film studios, our parks business and streaming, all of which are inextricably linked to our brands and franchises.”

Linear advertising and television subscriptions are down, its movie studio has been more miss than hit at the box office. Iger said that the company would be looking to improve the quality of its studio films as well as reduce the number of released titles and the cost per title.

“The performance of some of our recent films has definitely been disappointing, and we don’t take that lightly,” Iger said on the call. “As you’d expect we’re focused on improving the quality of the films we’ve got coming up. It’s something I’m working closely with the studio on.”

Exploring AI development

Some good news for the House of Mouse: its parks, experiences and products division saw a 13% increase in revenue to $8.3 billion during the quarter. Disney saw strength at its international parks, while domestic parks, particularly Walt Disney World in Florida, saw a slowdown in attendance and hotel room purchases.

However, less good news for striking writers and actors in the US, as Disney has initiated a dedicated team to delve into the realm of artificial intelligence and its potential applications. This comes amidst ongoing strikes involving the Hollywood writers and actors who aim to limit what they see as the technology's dangerous and growing influence within the industry.

Disney has created 11 job positions focused on AI and machine learning, indicating a desire to expand its use of AI across divisions such as studios, theme parks, and advertising. The task force is exploring internal AI development avenues and forging partnerships with emerging start-ups.

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