Walt Disney Company Q1 Earnings Call Synopsis For 2021

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Walt Disney Company Stock Dropping

The Walt Disney Company held their Q1 Earnings call today at 4:30 PM. Here are the highlights:

-100k+ doses of the COVID-19 Vaccine has been administered at Disneyland.

– Disney+ is at 94.9 million subscribers

-ESPN+ is at 12.1 million subscribers

-Hulu  is at 39.4 million subscribers

-Hot Star will be released in Europe, Canada, New Zealand, and Singapore on February 23 and will have IP from 21st Century Fox as well as Star Branded originals and local programming.

-Bob Chapek mentions the upcoming Ryan Coogler’s Wakanda series for Disney+

-Disney is going to push Diversity and Inclusion

-‘Raya and the Last Dragon’ is about “Female Empowerment”, which I found ironic.

Disney Parks

-Disney parks attendance was up from last quarter. This was partly due to the increased capacity, which is evidenced by the crowded photos around the holidays.

-Chapek talked about the upcoming attractions “Remy’s Ratatouille Adventure” and “Guardians of the Galaxy Cosmic Rewind” to try and pump up investors. But no information was given other than dropping the names.

-He also mentioned the new Star Wars: Galactic Starcruiser hotel, but gave no information other than dropping the name to try and make people excited about the overpriced LARPing experience that will open someday.

-At Disneyland He mentioned that the Avengers Campus will open soon, but gave no more information other than mentioning it. He also mentioned that “Mickey and Minnie’s Runaway Railway” was coming eventually.

ABC has Grey’s Anatomy coming back. I didn’t even know it was still on.

Financials

-The Walt Disney Company has changed their way of reporting starting with this quarter. Now the earnings are done in two segments: Disney Media Entertainment, Distribution and Parks and Experiences and Products.

-ESPN had an ad revenue loss of 4% dues to cancelled events. But they didn’t lose as much as they could have.

Lower movie results because they had no movies in theaters in the quarter.

-They say you can’t compare it to last year because they had several big releases at the same time last year.

-Disney won’t be providing subscriber updates but they will update at the end of the quarter or if they think they should announce something like “milestones.”

More Parks

-$2.6 billion lost due to closures and reduced operating capacities.

-$1.19 million loss in operating due to parks being closed for some or all of the quarter.

-A lot of talking around how money was lost because of the Pandemic and reasons why.

-Attendance at Walt Disney World grew from last quarter to this quarter because they shoved in more people.

-Disneyland and Disneyland Paris are expected to stay closed through March, 2021.

They had an increase of games licensing revenue due to the new Spider-Man game.

Q&A Information:

-Chapek says there’s “ample demand” for the parks. He feels they have given sufficient assurances and they are pleased with future bookings. Industrial Engineering teams at Walt Disney World and Shanghai have found ways to increase attendance and keep their costs down to show positive gains. Basically they found ways to put more people in and say they have no decrease in safety.

-Bob Chapek talked about the difference in the take on ‘Soul’ vs ‘Mulan’ releases. He said they were “thrilled” that giving out ‘Soul’ to subscribers helped with aquisition and retention.  ‘Mulan’ as Premier Access was successful enough to use for “Raya and the Last Dragon.”

-He keeps pushing the terms flexibility and Chapek said they are intending for “Black Widow” to be theatrically released, but they may change that as time goes on. However they are currently still planning on a theatrical release.

-Disney feels the churn rates for Disney+ are doing better and will continue to decrease as time moves on.

-They think that the price increase won’t impact Disney+ much as it’s only a $1.00 monthly increase.

-Chapek brought up the cancellation of the Disneyland Annual Pass program. Claiming there is more demand than supply, well not yet it isn’t opened. He’s claiming they are resetting it so that they can improve the guest experience. (Uh huh.  Sure, that’s why.)

-Supply less than demand and people had pre-purchased tickets with their passes. I’m sure they want as much money as they can get.

-He says we “are about to see what could be at Disneyland and see some of those strategies born.”

-They are spending less on the parks this year. Does this mean the hole in EPCOT will stay there longer?

-Disney trying to get a deal with NFL about the Super Bowl, but only if it will benefit shareholders.

-Parks are currently operating at 35% capacity. They want people to have a good time so they spend more money to keep their per capita rates up.

-They should get to the majority of roll out markets for streaming by the end of 2021.

New content and library content is coming.

They will add something new to the service every week.

-Disney is happy with engagement when new content is released.

-Chapek expects that when more parks can open, and capacity increases, social distancing and mask wearing will be still going on through 2021. If vaccines are out in the numbers they hope to see this year, he feels that by 2022 we won’t have to distance or wear masks like we do now.

-Disney still expecting Disney+ to reach profitability in fiscal 2024. So they are operating at a loss until then.

-Chapek says powerhouse franchises “cranking out” content on a monthly basis is important to Disney+.  His wording “cranking out” makes me nervous. Quality content with powerhouse franchises is more important to fans that “cranked out” content.

That sums it up. You can find the actual report for the Quarter Here. It was a whole lot of nothing on news.

 



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