If you want to read The Walt Disney Company’s first quarter earnings for fiscal 2019.
Bob Iger started the congratulating Disney’s studios on their Oscar nominations. In the earnings report, Iger looks forward to the future where the Disney-Fox deal is complete and the launch of Disney+. “Building a robust direct-to-consumer business is our top priority, and we continue to invest in exceptional content and innovative technology to drive our success in this space.” That quote which Iger said in the earnings report is a common theme in the quarter one call. Disney’s focus is on making Disney+ a powerhouse.
Iger is also enthusiastic to bring the teams from 21st Century Fox over once the regulatory approval is finished. Once Disney has 21st Century Fox they will be able to create more content internally for Disney+ (more on this later on).
The first look at Disney+ will take place on April 11, during Disney’s investors day.
In more Disney+ news, Captain Marvel will be Disney’s first major release that will be heading straight to Disney+. This means the film will not be licensed to Netflix, Turner, or NBC. In a later question, Iger also confirmed that Disney will not mess with the traditional theatrical window.
Bob Iger also was questioned on why Disney bought third-party content from CBS Studios for Disney+. Disney bought the Gina Rodriguez produced show Diary of a Female President. Iger cited they will continue to do third-party licensing similar to how they’ve done their theme parks. Iger acknowledged how Disney used George Lucas and Avatar. Before they both became Disney properties. Iger also added that once the Fox deal is complete they will leverage existing IP’s from Fox for Disney+. Like the rumored X-Men series. Yet, one of the most interesting tidbits is that Iger is looking for other intellectual properties to add to the service to increase the content. Which is absolutely bonkers when you think about it considering the amount of treasured intellectual properties Disney already has.
During the call, Bob Iger hinted at the possibility of having one password to access Disney+, ESPN+, and Hulu. Iger even mentioned that the bundle would be at a discounted price. Prompting him to discuss price and value for the consumer.
Some other questions that were highlights from the call. Iger got asked his thoughts on sports gambling and how it relates to his company. Iger stated he doesn’t see Disney ever getting into the sports gambling business. Bob Iger also reaffirmed that Disney would continue Rated-R fare. Meaning that the Deadpool franchise wouldn’t be toned down to PG-13. Iger acknowledged that Disney would create a new banner for the adult Marvel content in an effort to avoid confusion.
Bob Iger also joked that Disney isn’t spending a lot on marketing for Star Wars: Galaxy’s Edge. He knows that is already going to be successful. Iger joked that the only marketing cost there will be is him tweeting “It’s open.”
The Disney CEO also faced a very tough question towards the end of the call. An analyst asked Iger: “Why has Disney not made a splash in the video game market? We live in a world where esports is more popular than ever and games like Fortnite are seen as competition to Netflix. Iger admitted that Disney has tried their hand at publishing video games before but they never really got it down. Iger said, “Disney is better at the licensing side.” He mentioned Disney’s relationship with EA. He then went on to list everything Disney is good at. It was a long list.
Parks, Experiences, and Consumer Products revenues for the first quarter increased 5% to $6.8 billion. Operating income at our international parks and resorts was down modestly compared to the prior-year quarter as lower results at Shanghai Disney Resort and Disneyland Paris were largely offset by an increase at Hong Kong Disneyland Resort. On the consumer products side, products based on Star Wars and Cars saw a decrease in revenue, they were offset by an increase in Spider-Man licensing.
On the Studio Entertainment side of things. Revenues for the quarter decreased 27%. The decrease comes from the prior-year had Thor: Ragnarok and Star Wars: The Last Jedi at the box office compared to Nutcracker and the Four Realms and Mary Poppins Returns. The decreases were partially offset by growth in TV/SVOD distribution results was due to the performance of Incredibles 2 and Avengers: Infinity War in the current quarter.
Media Networks revenues for the quarter increased 7% to $5.9 billion. Cable Networks revenues for the quarter increased 4% to $4.0 billion. Direct-to-Consumer & International revenues for the quarter decreased 1% to $918 million and segment operating loss increased from $42 million to $136 million. Disney will also forgo $150 million in licensing rights during fiscal 2019 as it prepares Disney+.
Analysts expected Disney to reach $15.14 billion in revenue. Disney actually topped that prediction and made $15.30 billion.
Nothing was too out of the ordinary on the call. Not every call will have the major news drop like quarter four of 2018. Yet we now have the reassurance that Disney will continue on the Deadpool franchise and that the company will not be publishing video games anytime soon.
Disney already warned us during quarter four that the bottom line would see some major red during the beginning of Disney+ and post-Fox deal. We will see our first look at Disney’s future bet Disney+ on April 11.
Zach Perilstein is the Editor-in-Chief of the Boardwalk Times
