Disney’s streaming biz conjures its first profitable quarter as theme parks lose their thrill
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Putting on “Moana”… for the 50th time. Investors had a clear takeaway from Disney’s expectation-beating quarterly report yesterday: entertainment’s on the up-and-up, and theme parks are not. Mickey’s streaming biz (Disney+, Hulu, and ESPN+) stole the show, posting its first-ever combined profit of $47M. That’s a reversal from last year’s $500M+ loss for the same quarter. Disney’s movie biz got a boost from “Inside Out 2,” which became the highest-grossing animated film. “Deadpool & Wolverine” is expected to pump up revenues this quarter. But it wasn’t all fairy-tale results…
Mouse trap: Operating income at Disney’s US theme parks fell 6% on higher expenses and flat attendance. Execs said “flattish” parks revenue will likely continue over the next few quarters.
Unmagic Mountain… Amusement parks thrived after the pandemic as people sought out real-life thrills. But higher park ticket prices have steered some folks to opt for cruises and global getaways instead. Last month, Comcast said quarterly sales at its Universal theme parks sank nearly 11%. Knott’s Berry Farm parent Cedar Fair saw record Q1 revenue, but in-park spending slipped. Six Flags, which merged with Cedar Fair last month, saw Q1 revenue fall 6% on the year after it sold fewer membership passes (Six Flags reports fresh #s today).
There’s a new Belle of the ball… Parks have long been a profit puppy for entertainment giants. Disney’s experiences segment (which includes parks and cruises) makes up over half of the co’s annual profit. But as attendance cools, media titans are focusing on juicing streaming profitability. This week Disney announced it would hike prices across all three of its streamers and roll out a Netflix-esque password crackdown “in earnest” next month.