A booming subscriber base and the return of theme park crowds was enough to bring Disney a better-than-expected quarterly earnings report. There was further good news in the fact that the total revenues enjoyed by Disney between April and June was up 26% over the previous year, bringing in $1.5 billion to the entertainment brand.
All of which was enough to push up the price of Disney stock by over 6% in the after-hours trading following the report. However, the efforts gained to harness the latest wave of Disney+ subscribers came at a cost of the brand actually losing $1.1 billion in the quarter. While this paints a conflicted picture, it’s enough to show that Disney is back on track.
The Disney+ streaming service is now a key part of Disney’s portfolio, and it looks to be gaining the upper hand over Netflix. This is because Disney has now managed to pick up 221.1 million subscriptions, edging narrowly ahead of Netflix which lost one million accounts and now was just 220.67 million subscribers.
What was particularly impressive was the fact that of the 14.4 million Disney+ accounts added, a large proportion of these came from outside the US – a positive trend that had not been anticipated. Disney also announced that it would be launching an ad-funded streaming service outside of the US in 2023.
However, there was a slight dampener on the positive news in that the brand would be losing its hugely lucrative rights to cricket coverage in India. This would almost certainly cut subscriber growth in the coming forecasts.
While Disney’s streaming services may get all of the headlines, it’s actually the brand’s theme parks that did the leg-work in boosting the third-quarter earnings report. This is because there was $3 billion in revenue gained from the Disney theme parks, experiences and products division, and the overall operating income jumped by $1.8 billion compared to the same time last year.
Such a boost in figures was gained from an increase in overall attendance at the theme parks, alongside a jump in hotel resort and cruise ship bookings. This was clearly impossible a year ago where lockdown conditions were still in force over large areas of the world. But a drop in restrictions has meant that Disney can ramp up capacity and bring back a range of popular attractions such as theatrical performances and meet-and-greets.
In fact, the overall demand at Disney theme parks is actually exceeding that of the pre-pandemic era, and the fact that the Disney Cruise Line is back on track is a positive move for the beleaguered cruise ship industry. Plus with the attendance at the theme parks being regarded as a bellwether for the prevailing economic conditions, it’s hoped that Disney’s recovery could indicate good news for the rest of the US economy.
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