Gifts / Sports & Toys

On the evening of August 12, Beijing time, Disney released its first financial report after the epidemic. According to the financial report, Disney's overall performance turned into a profit, with total revenue of US$17.022 billion, a year-on-year increase of 45%; net profit of US$1.123 billion and a loss of US$4.721 billion in the same period last year. Although it has not yet returned to the level of 2019, the revenue figure has exceeded Wall Street's consensus estimate of 16.76 billion U.S. dollars.

Bob Chapek, CEO of Disney, said: "The third quarter's performance was very strong. In the face of the challenge of the epidemic, the company is still growing and we are satisfied with the company's development trend. We will continue to target parks and resorts around the world. Develop new experiences and provide customer-centric services."

01

Disneyland, experience, and product revenue increased fourfold year-on-year

The financial report shows that in the quarter, Disney's revenue from parks, experiences and products increased to 4.34 billion U.S. dollars from 1.07 billion U.S. dollars in the same period last year.

The growth of Disney's parks and experience business was mainly due to the reopening of related parks and resorts. In the same period last year, the Walt Disney World Resort was closed for the entire season, and the Shanghai Disney Resort was only open for 48 days. In this quarter, the Walt Disney World Resort and Shanghai Disney Resort opened for the entire quarter. Hong Kong Disneyland, which was only open for 10 days last year, has also been open for 72 days this quarter.

But it is worth mentioning that Shanghai Disneyland has been in China for 5 years. In these 5 years, Disney has experienced three price increases. In July of this year, the official website of Shanghai Disney Resort released a ticket adjustment plan: starting from January 9, 2022, the regular day ticket will be adjusted to 435 yuan, the special regular day is 545 yuan, the peak day is 659 yuan, and the special peak day is 769 yuan, an increase. Both are around 10%.

Tourists and consumer spending increased, and the operating income of this part reached 356 million U.S. dollars, compared with a loss of 1.87 billion U.S. dollars in the same period last year. This profitability is mainly attributable to the consumer goods business. The operating income of this part of the business reached 564 million US dollars. Disney received higher revenue from products such as Mickey and Minnie, Star Wars, Disney Princess and Spider-Man.

Despite this, the operating income of Disney's local parks is only US$2 million, and the international parks still have a loss of US$210 million. Due to the impact of the new crown pneumonia epidemic, Disney has reported the loss of operating income in this sector in the past five quarters.

02

Streaming media platforms are developing strength, with nearly 174 million subscribers worldwide

The financial report shows that in terms of traditional media business, Disney received US$6.9 billion in revenue this quarter, an increase of 16% year-on-year, which is the fastest quarter year-on-year growth in recent years. When the data is extended to 9 months, the year-on-year growth is 4%, which is still one of the company's main sources of income.

However, the cable business is gradually showing a downward trend, not only because of the increase in production costs, but also the development trend of the entire industry. So Disney is also actively transforming and opening up the streaming media platform market.

At present, the total number of subscribers to Disney's streaming media business worldwide is close to 174 million, including Disney+ (116 million), ESPN+ (14.9 million) and Hulu (42.8 million).

According to the financial report for the third quarter of fiscal 2021, the number of subscribers to Disney+ increased by 101.7% year-on-year to 116 million in this quarter. Street Account's previous estimate was 114.5 million, and the result exceeded this expectation.

The success of Disney+ is based on Disney’s powerful content system. For example, Marvel Universe contributed super IP series such as "Wanda Vision", "Falcon and the Winter Soldier" and "Rocky" in Q3. On the other hand, Disney I also tried to put movies shown in traditional theaters online on streaming media platforms, such as "Black and White Witch Kuila" and "Legend of the Dragon". The financial report also mentioned that Marvel's only Chinese superhero single-player movie "Shang Qi" will be released in theaters and will be launched on the streaming media platform 45 days later.

Disney also announced that in November this year, the Disney+ streaming media platform will also land in South Korea, Hong Kong and Taiwan. In October, Disney+ Japan will also upgrade its existing content library to add more mass entertainment content.

It is worth noting that while the number of Disney+ subscribers has risen across the board, the average monthly income per user has dropped by 10% year-on-year to $4.16. Disney attributed the decline to the higher percentage of Disney+Hotstar subscribers compared with the same period last year. In contrast, the average monthly income of paying users of ESPN+ and Hulu has increased slightly.

Direct-to-consumer market revenues increased 57% in the quarter, reaching 4.3 billion U.S. dollars, and operating losses fell from 600 million U.S. dollars to 300 million U.S. dollars. The alleviation of operating losses was mainly due to the improved performance of Hulu.

Hulu's performance growth is reflected in subscription revenue and advertising revenue. To a lesser extent, the increase in subscription revenue was due to the increase in retail prices of Hulu Live TV+SVOD services, which resulted in higher subscription rates; the increase in advertising revenue was due to the increase in the number of platform impressions.

The sports content streaming media platform ESPN+ is a transformation and upgrade from the traditional media ESPN. ESPN+ subscriptions reached 14.9 million this season, and it is expected to obtain higher data in Q4. It is not difficult to see that watching sports programs through streaming media platforms has become a major trend.

03

Disney's film and television sector in the second half of the year is worth looking forward to

The epidemic has caused severe damage to the film distribution business, resulting in movie theaters' passenger flow is still far below the level before the epidemic, but Disney has not completely stagnated in the production of film and television content. It is understood that in the second half of this year, Disney Pictures will bring a series of exciting films to audiences around the world, including "Out of Control Players", "Legend of the Ten Rings", "Full House of Magic", "West Side Story", and "Ace Agent: Origin". Wait.

On the streaming side, the Beatles documentary "Get Back", the Marvel drama "Hawkeye", and the "Mandalorian" derivative drama "The Book of Boba Fett" (The Book of Boba Fett) and the National Geographic documentary "Welcome to Earth" (Welcome to Earth) and other exciting works will also meet the audience in the second half of the year.

Disney animation "Magic House" stills

"The wonderful journey has just begun. Disney's wonderful content makes our brand unique. With a strong character series, the best storytellers interpret Disney's story." Bob Chapek said in the earnings conference.