## Disney’s Financial Ups and Downs: A Closer Look
The Walt Disney Company, despite its magical reputation, is not immune to financial turbulence. With a modest 4% growth in overall revenue, the media giant is grappling with evolving consumer habits, the cord-cutting phenomenon, and a sluggish advertisement market.
CEO Bob Iger remains upbeat about Disney’s long-term trajectory. During the company’s recent quarterly earnings report, he pinpointed three sectors that he believes will spur future growth: movies, parks and cruises, and streaming/direct-to-consumer businesses.
### Movie Business: A Rollercoaster Ride
Disney’s movie division had a lukewarm summer, with Iger describing the performance of its recent releases as “disappointing.” Despite this setback, Iger underscored Disney’s impressive track record over the past decade, which includes blockbusters like ‘Avatar’ and ‘Frozen’. The company’s ability to leverage its robust intellectual property through TV spinoffs, character-driven merchandise, and movie-themed park rides remains a strong asset.
### Parks and Cruises: Steady Growth Amid Challenges
Disney’s theme parks and cruises saw a revenue increase of 13% to $8.3 billion. While attendance at Walt Disney World in Florida dipped, this was counterbalanced by increased attendance at its Shanghai and Hong Kong parks. Iger also reported an encouraging “booked occupancy” rate of 98% for upcoming Disney cruises.
### Streaming Services: Price Hikes and Subscriptions
Revenues for Disney’s direct-to-consumer offerings, including Disney+, ESPN+, and Hulu, rose by 9% to $5.5 billion. The revenue boost was primarily driven by price hikes rather than subscription growth. Iger revealed that previous price increases did not result in significant subscriber losses, which he found encouraging.
### The Unmistakable Impact of Cord-Cutting
Iger recently [stirred up anxiety](https://www.cnbc.com/2023/07/13/cnbc-exclusive-cnbc-transcript-disney-ceo-bob-iger-speaks-with-cnbcs-david-faber-on-squawk-box-today.html) when he hinted that Disney’s linear networks, including ABC, FX, and National Geographic, might not be integral to its core business in the future. The latest earnings report reinforced this possibility, with revenues for linear networks decreasing 7% to $6.7 billion.
### ESPN’s $2 Billion Bet
In a strategic move, ESPN is set to [partner](https://thewaltdisneycompany.com/espn-bet/) with PENN Entertainment in a $2 billion deal. The partnership aims to enable consumers to place bets with less friction within ESPN’s products. Despite being off-brand for family-friendly Disney, the move recognizes the potential revenue generated from sports betting.
### The Future of the Mouse House
Recent [rumors](https://www.hollywoodreporter.com/business/business-news/disney-apple-deal-1235559416/) of a potential buyout by a tech behemoth like Apple were dismissed by Iger as pure speculation. In November 2022, Iger returned from retirement to guide Disney through a challenging phase marked by alleged missteps by former CEO Bob Chapek. Initially expected to stay for two years, Disney’s board recently voted unanimously to [extend](https://thewaltdisneycompany.com/the-walt-disney-company-board-of-directors-extends-robert-a-igers-contract-as-ceo-through-2026/) Iger’s contract through the end of 2026.
Original Story at www.npr.org – 2023-08-10 00:15:23
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