On November 9th, Walt Disney Company (hereinafter referred to as "Disney") announced its fourth quarter results for the 2023 fiscal year. The financial report showed that Disney's fourth quarter revenue was 21.24 billion US dollars, a year-on-year increase of 5%, lower than the previously expected 21.33 billion US dollars; The net profit was $264 million, a year-on-year increase of 63%. As the audience's demand for watching movies gradually shifts towards mobile and online platforms, Disney, which has traveled a century, is also stepping up its efforts to expand the market influence of its streaming media business. This quarter marks the first quarter for Disney to adopt a new financial reporting structure, dividing its business into three departments: entertainment, sports, and experience. The entertainment department, which includes the streaming media business, has revenue of $9.524 billion, a year-on-year increase of 2%, Disney's repeated commitment to "increasing streaming profits" in multiple financial quarters was also achieved in the fourth quarter, with streaming business losses further narrowing and the total number of Disney+users reaching 150.2 million. In addition, Disney is also advancing its full control of the video website Hulu, and Disney+and Hulu will merge into one application to enrich their pawn count in the streaming tug of war. The transaction is expected to be completed by 2024.
Net profit in the fourth fiscal quarter increased by 63% year-on-year
On November 9th, Disney had already celebrated its 100th birthday, and it had been almost a whole year since 2022 when Robert Egger, the "old boss," was once again appointed as CEO.
According to the financial report, Disney's fourth quarter operating revenue was $21.24 billion, lower than the expected $21.33 billion, and a net profit attributable to ordinary shareholders of $264 million, a year-on-year increase of 63%. According to a reporter from Beijing Business Daily, Disney's revenue has been below expectations for two consecutive fiscal quarters.
In addition, in the fourth fiscal quarter, Disney adopted a new reporting structure for the first time, dividing the company's business into three parts: entertainment, sports, and experience. Entertainment includes streaming media business, sports includes ESPN sports network, and experience includes Disney theme parks, hotels, and surrounding areas. Among them, the revenue of Disney's entertainment business in this fiscal quarter was 9.524 billion US dollars, a year-on-year increase of 2%; The sports business revenue was 3.91 billion US dollars, basically unchanged from the same period last year; Experience business revenue reached 8.16 billion US dollars, a year-on-year increase of 13%.
Disney pointed out during the conference call that it is expected to achieve approximately $7.5 billion in cost reduction, which is approximately $2 billion higher than the target set earlier this year. The increase in profits is partly due to the profit growth of ESPN and theme parks, but the decrease in advertising revenue has dragged down revenue.
Streaming refill
With the decreasing trend of user incremental dividends on streaming platforms, competition has become increasingly fierce, while for platforms such as Binafi, Disney, which launched the streaming platform Disney+in 2019, started slightly later.
According to the financial report, Disney added 7 million new Disney+core users in the fourth quarter compared to the previous quarter, with a total number of users reaching 150.2 million. Compared to the same period last year, the losses in the streaming media business have narrowed. Meanwhile, Disney also stated that its streaming business has undergone structural adjustments and is expected to achieve profitability in the fourth quarter of the 2024 fiscal year.
According to previous reports, Disney's streaming business has accumulated operating losses of $10.8 billion.
However, in recent years, Disney has not given up expanding the number of chess pieces to cope with the tug of war in the streaming media market, focusing on "cost reduction". On November 9th, Disney announced that it will begin testing a new version of the app that integrates Disney+and Hulu streaming services. The official version is expected to be launched in the spring of 2024. According to Disney's recent announcement, it will acquire a 33% stake in Hulu from Comcast for at least $8.61 billion, achieving full control of Hulu. The transaction is expected to be completed in 2024.
In addition, in terms of content production that has received much attention from the outside world, Disney revealed during a conference call that sequels to "Lion King", "Toy Story", "Ice and Snow", and "Crazy Animal City" are already in production.
For more details on content side work and future plans for streaming media business, Beijing Business Daily contacted Disney, but as of press release, no response has been received.
Investment analyst Gao Jia pointed out that due to factors such as the ongoing months of strikes and delays in the production and release of popular IP films, the company's performance recovery may be delayed. The huge IP inventory is Disney's biggest advantage, and its layout of streaming media platforms is also expanding its IP monetization channels. However, competition in the future streaming media field will be more intense.