Several yardsticks can measure the success or failure of Walt Disney Co. (NYSE: DIS) with respect to earnings. They are primarily theme parks, traditional TV media and cable content, and its streaming business. Even if streaming is a relatively small portion of the total financial picture, it is the one many investors watch most closely. And it is the investors’ worry that Disney may fall behind the competition, particularly Netflix and Amazon. (These companies have the worst reputations.)
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Disney has hinted its content networks are in enough trouble that they may not be part of the company’s future. ESPN is looking for strategic partners, which would likely bring Disney money. Theme parks have been a financial anchor for decades and will be in the future.
CEO Bob Iger, who recently had his employment contract extended, was the architect of Disney+, the company’s largest streaming platform. It includes content from Disney, Marvel, National Geographic, Pixar and Star Wars. The smaller parts of Disney’s streaming portfolio are Hulu and ESPN+.
Disney’s most recent quarter showed Disney+ with 157.8 million subscribers. Wall Street expected 162 million. This was the second consecutive quarter in which Disney+ shrank. Disney+ launched at a price of $6.99 a month. It is now $10.99. However, some severe damage had been done. The low price point brought in subscribers but helped trigger billions of dollars in losses.
At roughly 160 million subscribers and falling, Disney may never catch the industry leaders. Netflix has 238 million subscribers and is growing. Amazon Prime Video has over 200 million. It is also part of Amazon Prime, which with its additional services makes it particularly attractive to consumers.
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