Disney investors have long been wary of the company’s media business, which has historically been seen as a burden. The narrative surrounding Disney’s financial performance has been dominated by streaming losses, declining traditional pay TV revenue, and box office failures. This has led to a stagnation in stock price, with shares falling about 24% over the past two years, while the S&P 500 has seen a 28% increase during the same period.
However, Disney’s second-quarter results paint a different picture. The combined streaming businesses of Disney, including Disney+, Hulu, and ESPN+, turned a profit for the first time, generating $47 million. This is a remarkable turnaround from a loss of $512 million in the same quarter a year ago. Additionally, Disney’s theatrical unit has been on a winning streak, with movies like “Inside Out 2” and “Deadpool & Wolverine” breaking records and bringing in substantial earnings. The company has even surpassed $3 billion in worldwide ticket sales, making it the top studio in 2024.
CEO’s Optimistic Outlook
Disney CEO Bob Iger expressed optimism about the future of the media business during the earnings conference call. He highlighted the momentum in the streaming sector and predicted further growth and profitability in fiscal 2025. Iger also mentioned plans to crack down on password sharing, starting in September, as a way to attract new subscribers and increase revenue. Similarly, the company is planning to raise prices for its streaming services in mid-October, with most plans costing $1 to $2 more per month.
In addition to the positive financial results, Iger listed a number of upcoming movie titles that Disney will be releasing in the next two years. These include highly anticipated films like ‘Moana’, ‘Mufasa’, ‘Captain America’, ‘Snow White’, and many more. The CEO emphasized the potential of these releases to drive box office success as well as global streaming value, further boosting investor confidence in the company’s future.
While Disney has committed to investing $60 billion in its theme parks and cruise lines over the next decade, the company is actively seeking to dispel the notion that its media units are dragging down its share price. Despite this emphasis on the parks, investors have been quick to react to any news related to the media business, causing fluctuations in the stock price.
Disney’s media business seems to be undergoing a significant transformation, with streaming services turning a profit and theatrical releases performing exceptionally well. With CEO Bob Iger’s optimistic outlook and upcoming investments in both content and theme parks, Disney appears to be on a path towards continued success and growth in the years to come.