Disney will host a Virtual Investor Day on December 10 to further detail its direct-to-consumer plans. Some investors are hoping that Disney will use the session to announce a more pronounced foray into sports streaming. “We’re going to put a lot of wind in our Disney + business,” Chapek said on the conference call.
Mr. Chapek, who took charge of Disney in February, recently restructured the company to bring streaming closer to the heart of Disney. The new setup is to divide the operation of Disney TV into two divisions – one focused on content creation (with a “primary focus” on content for streaming) and the other on distribution (with a full monitoring of profit and loss). It’s not yet clear how this will work, at least to those outside the company, but the reasoning is obvious: The traditional TV industry is stammering. New cost-conscious consumers are canceling their cable and satellite service in greater numbers, putting pressure on ad sales and subscription fees. Many people have opted for pay-per-view streaming options; Disney + has made Disney Channel unnecessary for many families, for example.
Mr. Chapek maintained that his reorganization was going well. “Despite the disruption of everyone’s roles, we have 100% buy-in,” he said.
Disney Media Networks, a division that includes ESPN and ABC, has been aided by the pandemic, at least from a fiscal standpoint, as production stoppages and the shift of college football games to subsequent quarters have eased the burden. costs at ABC. Ad sales benefited from an extra week in the quarter, a quirk of Disney’s tax reporting structure. The division posted operating profit of approximately $ 1.86 billion, an increase of 5% from the previous year.
It was another brutal period for Disney’s theme parks and consumer products division, where operating profit plunged $ 2.5 billion, resulting in a loss of $ 1.1 billion. Walt Disney World in Florida reopened in July with limited capacity, but other major properties, including Disney Cruise Line, remain closed due to the coronavirus.
Mr Chapek said that Disney World, which had reopened at 25% of its capacity, recently lifted the restrictions to 35% “while respecting the guidelines stipulated by the CDC for social distancing of six feet.” Reservations for Thanksgiving week are “near full capacity,” Christine M. McCarthy, Disney’s chief financial officer, said on the conference call.
Disney theme parks have long been viewed as an indicator of the economy at large. It’s unclear whether the masses – who now face pay cuts and job losses – will be able to afford a Disney vacation when the doors fully reopen. It took two years for the Disney Parks Division to fully recover from the last recession.