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A light show will be held at Enchanted Storybook Castle at Shanghai Disney Resort to celebrate Halloween in Shanghai, China on October 31, 2023.
Disney said it will continue to make significant cost cuts as it seeks to rebuild its business in a rapidly changing media environment.
The company announced an additional $2 billion in cost savings, on top of previously announced $5.5 billion in cost savings that included thousands of job cuts.
The company said it has no plans to cut jobs. Chief Executive Officer Bob Iger suggested on a conference call with investors that the job cuts would come primarily from the company’s struggling linear TV business.
Meanwhile, the company continues to incur losses from its Disney+ streaming business, but it has managed to significantly reduce losses in that division. Disney+ has never made a profit. After the price increase, Disney’s streaming revenue rose 12% last quarter, and its loss narrowed to $420 million from $1.4 billion a year earlier.
“This quarter’s results reflect the significant progress we have made over the past year,” CEO Bob Iger said in a statement. “While we still have work to do, these efforts have enabled us to get through this period of correction and start building our business again.”
disney stock The stock rose 4% in after-hours trading, rebounding from a nearly 10-year low.
Analysts surveyed by Refinitiv expected the company’s revenue to be $21.2 billion, slightly below expectations of $21.3 billion.
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Monday, October 30, 2023 at the Disney Store in the Times Square area of New York, USA.
Disney report arrives Turbulent times for the company The company is grappling with a streaming business that is grappling with wasting funds, cord-cutting, a recent string of box office failures, an ongoing actors strike and a legal battle with Republican presidential candidate Florida Gov. Ron DeSantis. .
The company said it is “actively managing its cost base” and plans to save $2 billion more than previously reported. Disney previously announced 7,000 job cuts in February as part of a $5.5 billion cost-cutting plan. The company announced Wednesday that its efficiency goal has expanded to $7.5 billion. No layoffs have been announced, but the expansion of cost cuts could hint at future layoffs.
Disney’s theme parks division has been a bright spot for the company, increasing more than 30% year over year. The company pointed to the strengths of its international theme parks and Disney cruises. But the company said revenue at Walt Disney World in central Florida was weak.
The company’s fiscal fourth quarter, which began in July and ended in October, included the summer downturn seen at the Walt Disney World Resort in Central Florida. In July, Disney World park goers experienced shorter-than-expected wait times for rides and fewer crowds than expected.
Disney’s flagship streaming service, Disney+, saw a 1% increase in its subscriber base in the U.S. and Canada during the quarter, and an 11% increase in subscribers internationally.
Ad-supported Disney+ added more than 2 million subscriptions in the fourth quarter, Iger said.
Disney has totaled more than $10 billion in losses from its streaming services business since introducing it in 2019.
Iger reiterated during Disney’s earnings conference that he is “confident” that the company’s streaming service will reach profitability by the end of 2024.
“We are bullish about the future of the streaming business,” Iger said.
In October, Disney raised the price of an ad-free Disney+ subscription to $13.99 per month, but kept the price of ad inventory at $7.99 per month.
But Disney+ isn’t the only streaming bet the company is making.
Earlier this month, Disney announced it would acquire a third of Comcast’s Hulu stock for $8.61 billion. This means Disney will own 100% of the streaming service.
Iger said a beta version of the Hulu and Disney+ app will launch in December, with a formal rollout expected in early spring 2024.
Disney’s linear TV business continues to slump, with fourth-quarter revenue down 9% from a year ago, an even bigger decline than the recent third quarter, when revenue fell 7%.
Earlier this year, Mr. Iger’s comments fueled speculation that some of Disney’s terrestrial television assets, including ABC, Disney Channel, FX and National Geographic, could be put up for sale.
Iger said the company “continues to evaluate each linear network option with the goal of identifying the best strategic path for the company and maximizing shareholder value.”
However, Iger also said that a review of the company’s linear TV assets “revealed significant cost savings opportunities over the long term, and we are doing so while continuing to deliver high-quality content.” He also said.
ESPN was an outlier in Disney’s media portfolio and continued to attract sports fans to cable TV. Iger said the network’s overall viewership was the highest in four years.
This is a developing story and will be updated.