Categories
Health

Disney is still losing money, but the streaming business is booming | Free Press

Burbank (dpa) – The Corona crisis brought another room to the red for Walt Disney.

In the three months to the end of September, the bottom line was $ 710 million (€ 601 million), as the US entertainment giant announced on Thursday after the US market closed. In the previous year there was still $ 777 million in profit. However, Disney slowly recovered from the shock of the crown, which had shut down much of the entertainment empire and caused a whopping $ 4.7 billion loss in the previous quarter.

CEO Bob Chapek once again highlighted the streaming business for the Disney + online video service as a great success, which at the end of the quarter already had almost 74 million users and therefore exceeded expectations. Disney + launched exactly one year ago to compete with Netflix. Despite Disney’s strong growth, the market leader is clearly still number one for the moment: Netflix recently had 195 million subscribers worldwide. Disney + is only available in about 20 countries.

Chapek described the streaming business as the “bright spot” on the balance sheet and “key to the future of our company.” It wasn’t until October that Disney decided to reorganize the company to bring its video-on-demand services even more to the fore. Disney’s online services, Hulu and ESPN +, also significantly increased their number of users in the last quarter, taking it to 36.6 million and 10.3 million users respectively at the end of September. Overall, the quarterly figures were well above analysts’ forecasts, initially causing the stock to rise sharply after trading hours.

The streaming boom isn’t paying off for Disney so far. Because the development and expansion of video services eat up a lot of money. The division is anything but profitable, the quarterly loss was $ 580 million. So it was, despite all the euphoria over high-growth streaming services, the classic cable division, and movie studios that made the money for Disney. However, gains here weren’t close enough to bring the consolidated balance sheet into overall positive territory. Hollywood studios are also suffering from the pandemic: Disney itself admitted that there was no significant theatrical production for the entire quarter.

Overall, Mickey Mouse Group remains hard hit, with sales falling 23 percent year-on-year to $ 14.7 billion. The amusement park, resort and cruise business, a major profit maker in normal times, is in particular crisis. Revenue here fell 61 percent to $ 2.6 billion and operating loss was $ 1.1 billion. The problem child is Disneyland California, which has been closed for months due to the pandemic, which, according to corporate management, will not change once. Due to the new blockade in France, Disneyland Paris was also closed again.

In all of last fiscal year 2020, Disney reported a net loss of $ 2.8 billion. For comparison: in the previous year, the group had made $ 10.4 billion. Revenue fell just six percent to $ 65.4 billion, initially business was still doing well, but then the pandemic intervened and caused billions in additional costs. According to financial data provider Factset, the group has suffered no annual losses since at least 1980. Disney’s fiscal year differs from the calendar year and ends in September.