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Tag: Robert A.Iger

  • Disney emerges profit during first financial report in streaming business

    Disney emerges profit during first financial report in streaming business

    Mumbai: Disney’s revenue for the quarter ending March 30 climbed to $22.1 billion compared to $21.8 billion in the corresponding period last year. Earnings per share for the quarter surged to $1.21 from 93 cents, exceeding analysts’ expectations of $1.02 per share on revenue of $20.53 billion.

    The company celebrated its first-ever profit in the streaming business, with expectations set for the combined streaming businesses to be profitable by the fiscal fourth quarter, in line with guidance established in 2019.

    The number of core Disney+ subscribers reached 117.6 million, while Hulu reported 50.2 million subscribers. However, paid subscribers for Disney+ Hotstar dropped to 36 million by 30 March 2024, from 38.3 million on 30 December 2023, with average monthly revenue per paid subscriber decreasing to $0.70 from $1.28 due to lower advertising revenue.

    According to Q2 FY24 report, a 17 per cent decrease in operating loss at Star India was noted due to reduced programming and production costs attributed to the non-renewal of Board of Control for Cricket in India rights. However, this was partially offset by increased costs for Indian Premier League matches due to more matches aired compared to the previous year.

    Disney+ Hotstar has been experiencing a decline in subscribers, losing 12.5 million paid subscribers in the third quarter ending on 1 July 2023, and an additional 2.8 million in November 2023.

    The sports unit, ESPN, saw a two per cent revenue increase to $4.3 billion, while the experiences division, which includes theme parks and consumer products, reported a 10 per cent increase to $8.4 billion. However, there was a 17 per cent decline in sports revenue from Star Sports, reaching $105 million in Q2FY24 versus $127 million in Q2FY23.

    The Walt Disney Company CEO Robert A.Iger expressed satisfaction with the strong performance in Q2, highlighting a 30 per cent increase in adjusted EPS(1) compared to the prior year. He said the positive outcomes of the growth initiatives set in motion the previous year, including highly anticipated theatrical releases, successful television shows, ESPN’s continued success, and strategic investments driving growth in the Experiences business.

  • Susan E Arnold becomes Disney’s first woman chairperson

    Susan E Arnold becomes Disney’s first woman chairperson

    Mumbai: In its 98-year history, the Walt Disney Company board of directors has elected Susan E Arnold as its first woman chairperson. Her appointment will be effective from 31 December.

    Arnold, a 14-year member of the Disney board who has served as its independent lead director since 2018, will succeed Robert A Iger as chairperson of the board when he departs the company at the end of the year.

    “Susan is an incredibly esteemed executive whose wealth of experience, unwavering integrity, and expert judgment have been invaluable to the Company since she first joined the Board in 2007,” said executive chairman and chairman of the board Robert A Iger. “Having most recently served as independent lead director, Susan is the perfect choice for chairman of the board, and I am confident the company is well-positioned for continued success under her guidance and leadership. It has been a distinct honour to work with Susan and our many other talented directors, and I am incredibly grateful for the support and wise counsel they have provided during my tenure.”

    Arnold brings to her role extensive public-company board experience and in-depth knowledge of brand management and marketing, environmental sustainability, product and business development, international consumer markets, finance, and executive and risk management. She was formerly an operating executive of the equity investment firm The Carlyle Group, where she served from 2013 to 2021. Previously, she served at Procter & Gamble as president of global business units from 2007 to 2009. Prior to that at Procter & Gamble, Arnold was vice chair – Beauty & Health from 2006, vice chair – Beauty from 2004, and president – global personal beauty care & global feminine care from 2002. She was a McDonald’s Corp director from 2008 to 2016, and NBTY Inc director from 2013 to 2017.

    “On behalf of the board, I would like to express my deepest gratitude to Bob Iger for his extraordinary leadership over the past decade-and-a-half,” said Arnold. “Bob has led Disney to amazing heights both creatively and financially, with his clear strategic vision for delivering high-quality branded storytelling, embracing cutting-edge technology, and expanding internationally, and he’s left an indelible mark on The Walt Disney Company that will be felt for generations to come. As I step into this new role as chairman of the board, I look forward to continuing to serve the long-term interests of Disney’s shareholders and working closely with CEO Bob Chapek as he builds upon the company’s century-long legacy of creative excellence and innovation.”

  • Disney appoints Bob Chapek as its new CEO; Bob Iger steps down

    Disney appoints Bob Chapek as its new CEO; Bob Iger steps down

    MUMBAI: The Walt Disney Company's Board of Directors has appointed Bob Chapek as chief executive officer with immediate effective. Chapek most recently served as chairman of Disney Parks, Experiences and Products.

    Robert A. Iger assumes the role of executive chairman and will direct the Company’s creative endeavors, while leading the Board and providing the full benefit of his experience, leadership and guidance to ensure a smooth and successful transition through the end of his contract on Dec. 31, 2021.

    “With the successful launch of Disney’s direct-to-consumer businesses and the integration of Twenty-First Century Fox well underway, I believe this is the optimal time to transition to a new CEO,” Iger said. “I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney’s multifaceted global businesses and operations, while I continue to focus on the company’s creative endeavors.”

    Iger added: “Bob will be the seventh CEO in Disney’s nearly 100-year history, and he has proven himself exceptionally qualified to lead the company into its next century. Throughout his career, Bob has led with integrity and conviction, always respecting Disney’s rich legacy while at the same time taking smart, innovative risks for the future. His success over the past 27 years reflects his visionary leadership and the strong business growth and stellar results he has consistently achieved in his roles at Parks, Consumer Products and the Studio. Under Bob’s leadership as CEO, our portfolio of great businesses and our amazing and talented people will continue to serve the company and its shareholders well for years to come.”

    “I am incredibly honoured and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated cast members and employees,” Chapek said. “Bob Iger has built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team. I share his commitment to creative excellence, technological innovation and international expansion, and I will continue to embrace these same strategic pillars going forward. Everything we have achieved thus far serves as a solid foundation for further creative storytelling, bold innovation and thoughtful risk-taking.”

    Disney Board independent lead director Susan Arnold said: “The Board has been actively engaged in succession planning for the past several years, and after consideration of internal and external candidates, we unanimously elected Bob Chapek as the next CEO of The Walt Disney Company. Mr. Chapek has shown outstanding leadership and a proven ability to deliver strong results across a wide array of businesses, and his tremendous understanding of the breadth and depth of the company and appreciation for the special connection between Disney and its consumers makes him the perfect choice as the next CEO.

    “Chapek will also benefit from the guidance of one of the world’s most esteemed and successful business leaders, Bob Iger,”  Arnold continued. “Over the past 15 years as CEO, Mr. Iger has transformed The Walt Disney Company, building on the company’s history of great storytelling with the acquisitions of Pixar, Marvel, Lucasfilm and Twenty-First Century Fox and increasing the Company’s market capitalization fivefold. Disney has reached unparalleled financial and creative heights thanks to Mr. Iger’s strong leadership and clear strategic vision. We believe Mr. Chapek’s leadership and commitment to this strategy will ensure that the Company continues to create significant value for our shareholders in the years ahead.”

    In Chapek’s new role as CEO, he will directly oversee all of the company’s business segments and corporate functions. Chapek will report to the executive chairman, Iger, and the Board of Directors. He will be appointed to the Board at a later date. A new head of Disney Parks, Experiences and Products will be named at a future time.

    Chapek served as Chairman of Disney Parks, Experiences and Products since the segment’s creation in 2018, and prior to that was Chairman of Walt Disney Parks and Resorts since 2015.

    As Chairman of Disney Parks, Experiences and Products, Chapek oversaw the company’s largest business segment, with operations around the globe and more than 170,000 employees worldwide. The segment includes Disney’s iconic travel and leisure businesses, encompassing six resort destinations in the United States, Europe and Asia, a top-rated cruise line, a popular vacation ownership programme, and an award-winning guided family adventure business. Disney’s global consumer products operations include the world’s leading licensing business across toys, apparel, home goods, digital games and apps, the world’s largest children’s print publisher, Disney store locations around the world, and the shopDisney e-commerce platform.

    During his tenure at the Parks segment, Chapek oversaw the opening of Disney’s first theme park and resort in mainland China, Shanghai Disney Resort; the addition of numerous guest offerings across Disney’s six resort destinations in the US, Europe and Asia, including the creation of the new Star Wars: Galaxy’s Edge lands at Disneyland and Walt Disney World and the addition of Marvel-inspired attractions around the globe; and the expansion of Disney Cruise Line with the announced construction of three new ships.

    From 2011 to 2015, Chapek was President of the former Disney Consumer Products segment, where he drove the technology-led transformation of the company’s consumer products, retail and publishing operations. Prior to that, he served as President of Distribution for The Walt Disney Studios and was responsible for overseeing the Studios’ overall content distribution strategy across multiple platforms including theatrical exhibition, home entertainment, pay TV, digital entertainment and new media. He also served as President of Walt Disney Studios Home Entertainment, where he spearheaded the successful “vault strategy” for the company’s iconic films and transformed the primary format of home entertainment from DVD to Blu-ray.

    Before joining Disney in 1993,  Chapek worked in brand management at H.J. Heinz Company and in advertising at J. Walter Thompson.

  • Disney’s Q1 numbers ride on parks and resorts segment

    Disney’s Q1 numbers ride on parks and resorts segment

    BENGALURU: The Walt Disney Company (Disney) reported 3.8 per cent year-on-year (yoy) increase in revenue and 0.5 per cent yoy increase in operating income before taxes for the quarter ended 31 December 2017 (Q1 2018, the quarter under review) as compared with the corresponding year ago quarter (quarter ended 31 December 2016, Q1 2017). Net income attributable to Disney, however, increased by 78.4 per cent yoy. Diluted earnings per share (EPS) for the quarter increased by 88 per cent to USD 2.91 from USD 1.55 in the prior-year quarter. Excluding a USD 1.6 billion one-time net tax benefit associated with new US federal income tax legislation (tax act) and certain other items affecting comparability, EPS for the quarter rose by 22 per cent to USD 1.89 from USD 1.55 in the prior-year quarter.

    Four segments—media networks, parks and resorts, studio entertainment, and consumer products and interactive media—contribute to Disney’s numbers. Except for the parks and entertainment segment, the other three segments reported a decline in segment income. Disney’s total revenue for the quarter under review was USD 15,351 million as compared with USD 14,784 million. Revenue from services increased by 4.7 per cent yoy to USD 12,984 million from USD 12,406 million while revenue from products declined by 0.5 per cent yoy to USD  2,367 million from USD 2,378 million.

    Segment operating income in Q1 2018 was USD 3,745 million as compared to USD 3,725 million in Q1 2017. Net income attributable to Disney in the quarter under review was USD 4,423 million as compared to USD 2,479 million in Q1 2017.

    Media Networks

    Two divisions contribute to Media Networks numbers – cable networks, and broadcasting. Media networks’ revenue for the quarter was flat at USD 6,243 million in Q1 2018 as compared to USD 6,233 million. Segment operating income declined 12.4 per cent yoy in Q1 2018 to USD 1,193 million from USD 1,162 million.

    Cable networks revenue increased 1.5 per cent yoy to USD 4,493 million from USD 4,428 million, while income declined 0.7 per cent yoy to USD 858 million from USD 864 million. The company says that lower operating income was due to a loss at BAMTech and a decline at ESPN, partially offset by growth at the Disney channels and Freeform. The decrease at ESPN was due to lower advertising revenue, partially offset by affiliate revenue growth and lower programming costs. Lower advertising revenue was due to a decrease in impressions and lower rates. Growth at the Disney channels and Freeform was driven by higher affiliate revenue and lower marketing costs. Affiliate revenue growth was due to contractual rate increases, partially offset by a decline in subscribers.

    The broadcasting division’s revenue for the quarter under review declined by 3 per cent yoy to USD 1,750 million in Q1 2018 from USD 1,805 million. Income decreased by 24.8 percent yoy to USD 285 million from USD 379 million. The company said that the decrease in operating income was due to lower advertising revenue, higher production cost write-downs, and a decline in programme sales income. These decreases were partially offset by affiliate revenue growth due to rate increases. Advertising revenue reflected fewer network impressions and lower political advertising at Disney-owned television stations, partially offset by higher network rates.

    Parks and resorts

    Revenue from parks and resorts for the quarter increased by 13.2 per cent yoy in Q1 2018 to USD 5,154 million from USD 4,555 million while segment operating income increased by 21.4 per cent yoy to USD 1,347 million. The company said that operating income growth for the quarter was due to increase at Disney’s domestic parks and resorts, cruise line and vacation club businesses as well as at Disneyland Paris.

    Domestic results benefited from the comparison to the impact of Hurricane Matthew, which occurred in the prior-year quarter. Higher operating income at domestic parks and resorts was driven by guest-spending growth and

    an increase in attendance, partially offset by higher costs. Guest-spending growth was due to higher average ticket prices, food, beverage and merchandise spending and average daily hotel room rates.

    Studio entertainment

    Studio entertainment revenue dipped by 0.6 per cent yoy to USD 2,504 million in Q1 2018 from USD 2,520 million and segment operating income declined 1.5 per cent yoy to USD 829 million from USD 842 million. The company said that an increase in theatrical distribution results was more than offset by decreases in home entertainment and TV/SVOD distribution results as well as lower income from consumer products and interactive media segment revenue share.

    Consumer products and interactive media

    Revenue declined by 1.8 per cent yoy to USD 1,450 million in Q1 2018 from USD 1,456 million and segment operating income declined by 3.9 per cent yoy to USD 617 million from USD 642 million. The company said that operating income reduced due to decreases at Disney’s merchandise licencing and retail businesses, partially offset by an increase at its games business. The decrease in merchandise licencing was due to unfavourable timing of minimum guarantee shortfall recognition and lower licencing revenue from merchandise based on Frozen and Finding Nemo/Dory, partially offset by increases from merchandise based on Cars and Star Wars. Disney’s retail business was affected by unfavourable foreign currency fluctuations. The increase at Disney’s games business was due to licencing revenue from Star Wars Battlefront II, which was released in the current quarter, whereas there was no comparable release in the prior-year quarter.

    Company speak

    “The strategic investments we’ve made have driven meaningful growth over the long term, and we remain confident in our ability to continue to deliver significant shareholder value,” said  Disney’s chairman and CEO Robert A Iger, “We’re excited about what lies ahead, with a robust film slate, the launch of our ESPN direct-to-consumer business, new investments in our theme parks, and our pending acquisition of Twenty-First Century Fox.”

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  • Disney parts ways with Netflix, plans sports & TV shows VoDs, buys BAMTech majority

    MUMBAI: Traditional studios too would want to take advantage of the changing viewing habits. Disney has agreed to acquire a majority ownership of the streaming and marketing service BAMTech, LLC and will launch its ESPN-branded multi-sport video streaming service (VoD) in early 2018, followed by a Disney-branded direct-to-consumer service in 2019. It will be Netflix-like services — one for films and television shows and another for sports. To that end, Disney is paying $1.58 billion for majority ownership of BAMTech.

    Meantime, Disney, in one of the boldest moves a traditional studio took against a leading digital platform, is ending its distribution agreement with Netflix for new releases. The subscription services (SVoD) would appeal to the millennials who are turning away from traditional media and subscribing to digital platforms Netflix. The ESPN service may feature 10,000 sporting events annually including Major League Baseball games.

    Under terms of the transaction, Disney will pay $1.58 billion to acquire an additional 42% stake in BAMTech—a global leader in direct-to-consumer streaming technology and marketing services, data analytics, and commerce management—from MLBAM, the interactive media and Internet (HHH) company of Major League Baseball. Disney previously acquired a 33% stake in BAMTech under an agreement that included an option to acquire a majority stake over several years, and today’s announcement marks an acceleration of that timetable for controlling ownership.

    “The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech’s full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the Company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands.”

    The ESPN-branded multi-sport service will offer a robust array of sports programming, featuring approximately 10,000 live regional, national, and international games and events a year, including Major League Baseball, National Hockey League, Major League Soccer, Grand Slam tennis, and college sports. Individual sport packages will also be available for purchase, including MLB.TV, NHL.TV and MLS Live.

    The new service will be accessed through an enhanced version of the current ESPN app. In addition to the multi-sport service, the ESPN app will include the news, highlights, and scores that fans enjoy today. Consumers who are pay TV subscribers will also be able to access the ESPN television networks in the same app on an authenticated basis. For many sports fans, this app will become the premier digital destination for all their sports content.

    The new Disney-branded service will become the exclusive home in the U.S. for subscription-video-on-demand viewing of the newest live action and animated movies from Disney and Pixar, beginning with the 2019 theatrical slate, which includes Toy Story 4, the sequel to Frozen, and The Lion King from Disney live-action, along with other highly anticipated movies. Disney will also make a significant investment in an annual slate of original movies, TV shows, short-form content and other Disney-branded exclusives for the service. Additionally, the service will feature a vast collection of library content, including Disney and Pixar movies and Disney Channel, Disney Junior and Disney XD television programming.

    With this strategic shift, Disney will end its distribution agreement with Netflix for subscription streaming of new releases, beginning with the 2019 calendar year theatrical slate.

    Plans are for the Disney and ESPN streaming services to be available for purchase directly from Disney and ESPN, in app stores, and from authorized MVPDs.

    “We’re very proud of the content distribution innovations driven by MLBAM and BAMTech over the past 15 years,” said Commissioner of Baseball Robert D. Manfred, Jr. “Major League Baseball will continue to work with Disney and ESPN to further grow BAMTech as it breaks new ground in technologies for consumers to access entertainment and sports programming.”

    “This is an exciting validation of our team, its achievements and the customer-centric platform it’s built,” said Michael Paull, Chief Executive Officer of BAMTech. “Yet, we’ve merely scratched the surface of what can be accomplished in a future where we combine Disney and ESPN’s world-class IP and our proprietary direct-to-consumer ecosystem.”

    The BAMTech transaction is subject to regulatory approval, and upon closing, Mr. Iger will serve as Chairman of the BAMTech Board. MLBAM and NHL will continue as minority stakeholders in BAMTech, with seats on the Board. Mr. Paull will report to Kevin A. Mayer, Senior Executive Vice President and Chief Strategy Officer, The Walt Disney Company. John Skipper, ESPN President and Co-Chairman, Disney Media Networks, will manage the new ESPN-branded service.

    The BAMTech transaction is expected to be modestly dilutive to Disney’s earnings per share for two years. Additional dilution as the Company implements its direct-to-consumer strategy will be dependent on the Company’s licensing approach and the level of investment in original programming.

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  • Disney acquires 33% stake in video streaming company BAMTech for $1 billion

    Disney acquires 33% stake in video streaming company BAMTech for $1 billion

    BENGALURU: The Walt Disney Company (Disney) announced that it has acquired a thirty three percent stake in Direct-To-Consumer video streaming company BAMTech for $1 billion to be paid in two tranches. One instalment will be paid immediately and one will be paid in January 2017, with Disney having the option of acquiring a majority stake in the company. BAMTech was previously formed by Major League Baseball (MLB). As part of the transaction, BAMTech was separated from MLB’s broader digital business, MLB Advanced Media (MLBAM).

    “Our investment in BAMTech gives us the technology infrastructure we need to quickly scale and monetize our streaming capabilities at ESPN and across our company,” said Disney chairman and CEO Robert A. Iger.

    Commissioner of Baseball Robert D Manfred, Jr. said, “Every day the powerful partnership of technology and content becomes more important to consumers. We are excited to get to work with Disney and our longtime partners at ESPN in the important and ever-changing area of content distribution.”

    “Bringing a multi-sport service directly to fans is an exciting opportunity that capitalizes on BAMTech’s premier digital distribution platform and continues ESPN’s heritage of embracing technology to create new ways to connect fans with sports,” said ESPN Disney Media Networks president and co-chair John Skipper. “As WatchESPN continues to grow and add value to the multichannel video subscription, this new service will be an outstanding complement.”

    Disney’s investment in BAMTech will provide the latter capital to accelerate growth of its proprietary video-delivery platform, deliver greater flexibility to clients and develop new technologies and capabilities says a Disney release. BAMTech will become a key partner for Disney in the delivery and support of streaming video and other digital products from Disney|ABC Television Group and ESPN, as well as its future digital initiatives.

    BAMTech will also collaborate with ESPN to launch and distribute a new ESPN-branded multi-sport subscription streaming service in the future. The direct-to-consumer service will feature content provided by both BAMTech and ESPN, and include live regional, national and international sporting events. Current content on ESPN’s linear networks will not appear on the new subscription streaming service.

    BAMTech is a player in direct-to-consumer streaming services, data analytics and commerce management with nearly 7.5 million total paid subscribers to its clients’ OTT products BAMTech’s roster of sports, news and entertainment clients includes HBO NOW, the National Hockey League, Major League Baseball, the PGA TOUR, WWE Network and Ice Network (a digital platform for professional figure skating).

    Following Disney’s acquisition of a stake in BAMTech, the National Hockey League received a minority interest in BAMTech, as the result of a previous agreement, says the Disney release.

  • Disney acquires 33% stake in video streaming company BAMTech for $1 billion

    Disney acquires 33% stake in video streaming company BAMTech for $1 billion

    BENGALURU: The Walt Disney Company (Disney) announced that it has acquired a thirty three percent stake in Direct-To-Consumer video streaming company BAMTech for $1 billion to be paid in two tranches. One instalment will be paid immediately and one will be paid in January 2017, with Disney having the option of acquiring a majority stake in the company. BAMTech was previously formed by Major League Baseball (MLB). As part of the transaction, BAMTech was separated from MLB’s broader digital business, MLB Advanced Media (MLBAM).

    “Our investment in BAMTech gives us the technology infrastructure we need to quickly scale and monetize our streaming capabilities at ESPN and across our company,” said Disney chairman and CEO Robert A. Iger.

    Commissioner of Baseball Robert D Manfred, Jr. said, “Every day the powerful partnership of technology and content becomes more important to consumers. We are excited to get to work with Disney and our longtime partners at ESPN in the important and ever-changing area of content distribution.”

    “Bringing a multi-sport service directly to fans is an exciting opportunity that capitalizes on BAMTech’s premier digital distribution platform and continues ESPN’s heritage of embracing technology to create new ways to connect fans with sports,” said ESPN Disney Media Networks president and co-chair John Skipper. “As WatchESPN continues to grow and add value to the multichannel video subscription, this new service will be an outstanding complement.”

    Disney’s investment in BAMTech will provide the latter capital to accelerate growth of its proprietary video-delivery platform, deliver greater flexibility to clients and develop new technologies and capabilities says a Disney release. BAMTech will become a key partner for Disney in the delivery and support of streaming video and other digital products from Disney|ABC Television Group and ESPN, as well as its future digital initiatives.

    BAMTech will also collaborate with ESPN to launch and distribute a new ESPN-branded multi-sport subscription streaming service in the future. The direct-to-consumer service will feature content provided by both BAMTech and ESPN, and include live regional, national and international sporting events. Current content on ESPN’s linear networks will not appear on the new subscription streaming service.

    BAMTech is a player in direct-to-consumer streaming services, data analytics and commerce management with nearly 7.5 million total paid subscribers to its clients’ OTT products BAMTech’s roster of sports, news and entertainment clients includes HBO NOW, the National Hockey League, Major League Baseball, the PGA TOUR, WWE Network and Ice Network (a digital platform for professional figure skating).

    Following Disney’s acquisition of a stake in BAMTech, the National Hockey League received a minority interest in BAMTech, as the result of a previous agreement, says the Disney release.

  • Q2-16: Disney income up 10 percent aided by ESPN performance, studio entertainment

    Q2-16: Disney income up 10 percent aided by ESPN performance, studio entertainment

    BENGALURU: The Walt Disney Company Inc (Disney) reported 9.8 percent year-over-year (y-o-y) increase in operating income for the quarter ended 2 April 2016 (Q2-16, current quarter) as compared to the corresponding year ago quarter. Operating income in the current quarter was $3,822 million as compared to $3,482 million in Q2-15 (quarter ended 28 March 2015).

    The company saw an increase of $340 million in operating income in its current quarter vis-à-vis the corresponding prior year quarter. Its Media Networks segment reported operating income of $198 million, while its Studio Entertainment segment reported operating income of $115 million.
    Disney’s Media Networks segment’s sub-segment Cable Networks of which ESPN is a part saw 12.3 percent y-o-y increase in operating income. The increase at ESPN was partially offset by lower equity income from A&E Television Networks says Disney.

    Disney reported 4.1 percent y-o-y growth in revenue in Q2-16 at $12,969 million as compared to $12,461 million in the corresponding prior year quarter. Growth in revenue of $508 million was contributed to by $168 million and $377 million growth by Disney’s ‘Parks & Resorts’ and ‘Studio Entertainment’ segments respectively.

    Company speak

    “We’re very pleased with our overall results in Q2, which marks our 11th consecutive quarter of double-digit growth in adjusted EPS,” said Disney chairman and CEO Robert A. Iger. “Our Studio’s unprecedented winning streak at the box office underscores the incredible appeal of our branded content, which we continue to leverage across the entire company to drive significant value. Looking forward, we are thrilled with the Studio’s slate and tremendously excited about the June 16th grand opening of the spectacular Shanghai Disney Resort.”

    Segment numbers excerpts

    Media Networks

    Media Networks revenue in Q2-16 was relatively flat y-o-y (declined 0.3 percent) at $5,793 million as compared to $5,810 million in Q2-15. The  segment’s operating income increased 9.4 percent y-o-y to $2,299 million in the current quarter from $2,101 million during the corresponding prior year quarter.

    Disney Media Networks segment has two sub-segments – Cable Networking and Broadcasting.

    Cable Networks revenue for the quarter decreased 1.9 percent y-o-y to $3,955 billion from $4,030 million in Q2-15. Operating income in Q2-16 increased 12.3 percent y-o-y to $2,021 million from $1,799 million due to an increase at ESPN, partially offset by lower equity income from A&E. 

    The increase at ESPN was due to the benefit of lower programming costs and higher affiliate revenues, partially offset by a decrease in advertising revenue.

    Lower equity income from A&E was due to a decrease in advertising revenue, higher programming costs and a negative impact from the conversion of the H2 channel to Viceland as Viceland is in a start-up phase says Disney.

    Broadcasting revenue for the quarter increased 3.3 percent to $1,838 million from $1,780 million. Operating income of the sub-segment decreased 7.9 percent y-o-y to $278 million from $302 million due to lower operating income from program sales and higher programming and marketing costs, partially offset by advertising and affiliate revenue growth. Lower operating income from program sales was due to a significant SVOD sale in the prior-year quarter and a higher cost mix of programs sold in the current quarter. 

    The increase in programming costs was due to a higher average cost of new scripted programming and increased program cost write-offs. The increase in network advertising revenue was due to higher rates, partially offset by lower ratings. Affiliate revenue growth was primarily due to contractual rate increases.

    Parks and Resorts

    Parks and Resorts revenue for the current quarter increased 4.5 percent y-oy- to $3,928 million from $3.760 million. Segment operating income in Q2-16 increased 10.2 percent y-o-y to $624 million from $566 million. Operating income growth for the quarter was due to an increase at Disney’s domestic operations, partially offset by a decrease at its international operations.

    Studio Entertainment

    Studio Entertainment revenue for the current quarter increased 22.4 percent to $2,062 million from $1,685 million in Q2-15. Segment operating income increased 26.9 percent to $542 million from $427 million. 

    Disney says that higher operating income was due to an increase in theatrical distribution results and growth in TV/SVOD distribution, partially offset by the impact of foreign currency translation due to the strengthening of the US dollar against major currencies, decreased home entertainment results and higher film cost impairments.

    The increase in theatrical distribution results was due to the strong performance of Star Wars: The Force Awakens and Zootopia in the current quarter compared to the continuing performance in the prior year quarter of Big Hero 6 and Into the Woods, both of which were released domestically in the first quarter of the prior year. Higher TV/SVOD distribution results were driven by international growth. The decrease in home entertainment results was primarily due to lower unit sales reflecting the performance of Big Hero 6, Frozen and Marvel’s Guardians of the Galaxy in the prior-year quarter compared to The Good Dinosaur, Inside Out and Marvel’s Ant-Man in the current quarter. The decrease from lower unit sales was partially offset by the benefit from Star Wars Classic titles that are distributed by a third party.

    Consumer Products & Interactive Media

    Consumer Products & Interactive Media revenue for the current quarter decreased 1.7 percent to $1,186 million from $1,286 million. Segment operating income decreased 8 percent to $357 million from $388 million. 

    Lower operating income was primarily due to the impact of foreign currency translation due to the strengthening of the U.S. dollar against major currencies, lower operating margins and comparable store sales at Disney’s retail business and lower results for Infinity. 

    These decreases were partially offset by higher licensing revenues. Increased licensing revenues were driven by higher revenue from Star Wars  merchandise, partially offset by an adverse impact from the timing of minimum guarantee shortfall recognition and a decrease in revenue from merchandise based on Frozen.

     

  • Q2-16: Disney income up 10 percent aided by ESPN performance, studio entertainment

    Q2-16: Disney income up 10 percent aided by ESPN performance, studio entertainment

    BENGALURU: The Walt Disney Company Inc (Disney) reported 9.8 percent year-over-year (y-o-y) increase in operating income for the quarter ended 2 April 2016 (Q2-16, current quarter) as compared to the corresponding year ago quarter. Operating income in the current quarter was $3,822 million as compared to $3,482 million in Q2-15 (quarter ended 28 March 2015).

    The company saw an increase of $340 million in operating income in its current quarter vis-à-vis the corresponding prior year quarter. Its Media Networks segment reported operating income of $198 million, while its Studio Entertainment segment reported operating income of $115 million.
    Disney’s Media Networks segment’s sub-segment Cable Networks of which ESPN is a part saw 12.3 percent y-o-y increase in operating income. The increase at ESPN was partially offset by lower equity income from A&E Television Networks says Disney.

    Disney reported 4.1 percent y-o-y growth in revenue in Q2-16 at $12,969 million as compared to $12,461 million in the corresponding prior year quarter. Growth in revenue of $508 million was contributed to by $168 million and $377 million growth by Disney’s ‘Parks & Resorts’ and ‘Studio Entertainment’ segments respectively.

    Company speak

    “We’re very pleased with our overall results in Q2, which marks our 11th consecutive quarter of double-digit growth in adjusted EPS,” said Disney chairman and CEO Robert A. Iger. “Our Studio’s unprecedented winning streak at the box office underscores the incredible appeal of our branded content, which we continue to leverage across the entire company to drive significant value. Looking forward, we are thrilled with the Studio’s slate and tremendously excited about the June 16th grand opening of the spectacular Shanghai Disney Resort.”

    Segment numbers excerpts

    Media Networks

    Media Networks revenue in Q2-16 was relatively flat y-o-y (declined 0.3 percent) at $5,793 million as compared to $5,810 million in Q2-15. The  segment’s operating income increased 9.4 percent y-o-y to $2,299 million in the current quarter from $2,101 million during the corresponding prior year quarter.

    Disney Media Networks segment has two sub-segments – Cable Networking and Broadcasting.

    Cable Networks revenue for the quarter decreased 1.9 percent y-o-y to $3,955 billion from $4,030 million in Q2-15. Operating income in Q2-16 increased 12.3 percent y-o-y to $2,021 million from $1,799 million due to an increase at ESPN, partially offset by lower equity income from A&E. 

    The increase at ESPN was due to the benefit of lower programming costs and higher affiliate revenues, partially offset by a decrease in advertising revenue.

    Lower equity income from A&E was due to a decrease in advertising revenue, higher programming costs and a negative impact from the conversion of the H2 channel to Viceland as Viceland is in a start-up phase says Disney.

    Broadcasting revenue for the quarter increased 3.3 percent to $1,838 million from $1,780 million. Operating income of the sub-segment decreased 7.9 percent y-o-y to $278 million from $302 million due to lower operating income from program sales and higher programming and marketing costs, partially offset by advertising and affiliate revenue growth. Lower operating income from program sales was due to a significant SVOD sale in the prior-year quarter and a higher cost mix of programs sold in the current quarter. 

    The increase in programming costs was due to a higher average cost of new scripted programming and increased program cost write-offs. The increase in network advertising revenue was due to higher rates, partially offset by lower ratings. Affiliate revenue growth was primarily due to contractual rate increases.

    Parks and Resorts

    Parks and Resorts revenue for the current quarter increased 4.5 percent y-oy- to $3,928 million from $3.760 million. Segment operating income in Q2-16 increased 10.2 percent y-o-y to $624 million from $566 million. Operating income growth for the quarter was due to an increase at Disney’s domestic operations, partially offset by a decrease at its international operations.

    Studio Entertainment

    Studio Entertainment revenue for the current quarter increased 22.4 percent to $2,062 million from $1,685 million in Q2-15. Segment operating income increased 26.9 percent to $542 million from $427 million. 

    Disney says that higher operating income was due to an increase in theatrical distribution results and growth in TV/SVOD distribution, partially offset by the impact of foreign currency translation due to the strengthening of the US dollar against major currencies, decreased home entertainment results and higher film cost impairments.

    The increase in theatrical distribution results was due to the strong performance of Star Wars: The Force Awakens and Zootopia in the current quarter compared to the continuing performance in the prior year quarter of Big Hero 6 and Into the Woods, both of which were released domestically in the first quarter of the prior year. Higher TV/SVOD distribution results were driven by international growth. The decrease in home entertainment results was primarily due to lower unit sales reflecting the performance of Big Hero 6, Frozen and Marvel’s Guardians of the Galaxy in the prior-year quarter compared to The Good Dinosaur, Inside Out and Marvel’s Ant-Man in the current quarter. The decrease from lower unit sales was partially offset by the benefit from Star Wars Classic titles that are distributed by a third party.

    Consumer Products & Interactive Media

    Consumer Products & Interactive Media revenue for the current quarter decreased 1.7 percent to $1,186 million from $1,286 million. Segment operating income decreased 8 percent to $357 million from $388 million. 

    Lower operating income was primarily due to the impact of foreign currency translation due to the strengthening of the U.S. dollar against major currencies, lower operating margins and comparable store sales at Disney’s retail business and lower results for Infinity. 

    These decreases were partially offset by higher licensing revenues. Increased licensing revenues were driven by higher revenue from Star Wars  merchandise, partially offset by an adverse impact from the timing of minimum guarantee shortfall recognition and a decrease in revenue from merchandise based on Frozen.

     

  • FY-2015: Disney revenue up 7.5%; net income up 11.7%

    FY-2015: Disney revenue up 7.5%; net income up 11.7%

    BENGALURU: The Walt Disney Company Inc reported 7.5 per cent YoY increase in consolidated revenue at $52,465 million for the year ended 3 October, 2015 (FY-2015, current year) as compared to the $48.813 million reported for the year ended 27 September, 2014 (FY-2014, previous year). Net income in the current year increased 11.7 per cent YoY to $8.382 million from $7,501 million.

     

    “We had a strong quarter, with adjusted EPS up 35 per cent, completing our fifth consecutive year of record performance. In Fiscal 2015 we delivered the highest revenue, net income and adjusted EPS in the Company’s history, reflecting the power of our great brands and franchises, the quality of our creative content, and our relentless innovation to maximize value from emerging technologies,” said Disney chairman and CEO Robert A Iger.

     

    For the quarter ended 3 October, 2015 (Q4-2015, current quarter), consolidated revenue increased 9.1 per cent YoY to $13.512 million as compared to $12,389 million in the quarter ended 27 September, 2014 (Q4-2014). Net Income in Q4-2015 increased 7.3 per cent to $1,609 million as compared to $1,499 million.

     

    Segment Results

     

    Four of the five Disney’s segments – Media Works, Parks and Resorts, Studio Entertainment and Consumer Products reported growth in revenue in FY-2015 and Q4-2015 as compared to FY-2014 and Q4-2014 respectively, while the fifth segment – Interactive – reported decline in revenues. However, all the five segments reported growth in segment operating income in the current year and quarter as compared to the previous year and year ago quarter respectively.

     

    Media Networks

     

    Media Networks revenue in FY-2015 increased 10 per cent to $23,264 million from $21,152 million in the previous year. Segment Operating income increased 6.4 per cent in the current year to $7,793 million as compared to $7,321 million in FY-2014.

     

    The segments revenue in the current quarter increased 11.7 per cent YoY to $5,286 million from $5,217 million. Operating income for the segment increased 26.6 per cent YoY to $1,819 million from $1,437 million.

     

    Disney says that Operating income growth at Media Networks was driven by higher affiliate fees, increased advertising revenue at ESPN and the ABC Television Network and higher operating income from program sales. These increases were partially offset by an increase in programming and production costs at ESPN and, to a lesser extent, the Disney Channels and the ABC Television Network.

     

    Two sub-segments contribute to Disney’s Media Networks – Cable Networks and Broadcasting.

     

    Cable Networks

     

    Cable Networks revenue in FY-2015 increased 9.7 per cent to $16,581million from $15,110 million in the previous year. Segment Operating income increased 4.9 per cent in the current year to $6,787 million as compared to $6,467 million in FY-2014.

     

    The sub-segments revenue in the current quarter increased 12.4 per cent YoY to $4,245 million from $3,776 million. Operating income for the sub- segment increased 29.8 per cent YoY to $1,655 million from $1,275 million.

     

    For Q4-2014, Disney says that Operating income at Cable Networks increased due to an increase at ESPN and, to a lesser extent, A&E Television Networks (A&E) and the Disney Channels. The increase at ESPN reflected higher affiliate and advertising revenues, partially offset by an increase in programming costs. Affiliate revenue growth was driven by contractual rate increases and an increase in subscribers. The increase in subscribers was due to a full quarter of the SEC Network, which launched in August 2014, partially offset by a decline in subscribers at certain of Disney’s networks.

     

    Growth in advertising revenue reflected higher units sold, partially offset by lower ratings. Higher programming costs reflected a full quarter for the SEC Network, additional rights for the US Open Tennis tournament and contractual rate increases for Major League Baseball and NFL rights, partially offset by the absence of rights costs for NASCAR.

     

    Higher equity income from A&E was due to lower programming and marketing costs, partially offset by lower advertising and affiliate revenue. The increase at Disney Channels was driven by higher affiliate revenues, partially offset by higher programming costs. Affiliate revenue growth reflected contractual rate increases domestically and subscriber growth internationally. The programming cost increase was driven by higher costs for original programming, including more hours of new series in the current quarter.

     

    Broadcasting

     

    Cable Networks revenue in FY-2015 increased 10.6 per cent to $6,683 million from $6,042 million in the previous year. Segment Operating income increased 17.8 per cent in the current year to $1,006 million as compared to $854 million in FY-2014.

     

    The sub-segments revenue in the current quarter increased 9.7 per cent YoY to $1,581 million from $1,441 million. Operating income for the sub-segment was flat YoY to $164 million from $163 million.

     

    For Q4-2014, Disney says that growth in advertising and affiliate revenue was offset by higher programming costs, lower operating income from program sales, an equity loss from Hulu and higher marketing costs for the fall season launch. The increase in advertising revenue reflected higher units sold, including the benefit of the extra week of operations, and higher rates. Affiliate revenue growth was due to contractual rate increases and new contractual provisions. Higher programming costs reflected the impact of an additional week of operations. Lower operating income from program sales was driven by an increase in cost amortisation and lower sales. Program sales reflected decreases for My Wife and Kids and America’s Funniest Home Videos, partially offset by the sale of How to Get Away with Murder in the current quarter. The equity loss from Hulu was due to higher content and marketing costs.

     

    Parks & Resorts

     

    Parks and Resorts segment revenue in the current year increased seven per cent to $16,162 million as compared to the $15,099 in FY-2014. Segment Operating income increased 13.8 per cent in the current year to $3,301 million as compared to $2,663 million in FY-2014.

     

    The segments revenue in the current quarter increased 10.1 per cent YoY to $4,361 million from $3,960 million. Operating income for the segment increased 7.4 per cent YoY to $738 million from $687 million.

     

    Growth at Parks and Resorts was driven by Disney’s domestic operations due to higher average guest spending, attendance and occupancy, partially offset by increased costs driven by inflation and volumes. Results at Disney’s international parks and resorts operations reflected lower attendance and occupancy at Hong Kong Disneyland Resort and higher pre-opening expenses at Shanghai Disney Resort.

     

    Studio Entertainment

     

    Studio Entertainment segment revenue in the current year increased 1.2 per cent to $7,366 million as compared to the $7,278 in FY-2014. Segment Operating income increased 27.4 per cent in the current year to $1,973 million as compared to $1,549 million in FY-2014.

     

    The segments revenue in the current quarter was flat (increased 0.3 per cent) YoY to $1,783 million from $1,778 million. Operating income for the segment more than doubled (2.09 times) YoY to $530 million from $254 million.

     

    At Studio Entertainment, operating income growth was due to a higher revenue share with the Consumer Products segment reflecting the success of Frozen merchandise, an increase in television distribution revenue and higher domestic theatrical results. This growth was partially offset by a decline in home entertainment units sold reflecting the success of Frozen in the prior year.

     

    For Q4-2015, Disney says that Operating income growth was due to increased TV/SVOD distribution results, lower film cost impairments, improved theatrical results and a higher revenue share with the Consumer Products segment. These increases were partially offset by lower home entertainment results.

     

    The increase in TV/SVOD distribution was driven by a lower average production cost amortisation rate, the timing of title availabilities in international pay and domestic free television markets as well as SVOD revenue growth internationally. Lower production cost amortisation reflected a higher sales mix of catalogue titles in the current quarter.

     

    Operating income growth in theatrical distribution was driven by the performance of Inside Out and Ant-Man in the current quarter compared to Guardians of the Galaxy, Maleficent and no Pixar title in the prior-year quarter. Theatrical distribution revenues were lower in the current quarter as the prior-year quarter also included Planes: Fire and Rescue and The Hundred-Foot Journey, whereas the current year included no Disney feature animation or DreamWorks titles in release. Increased revenue share was due to the performance of Frozen merchandise in the current quarter.

     

    The decrease in home entertainment was due to lower net effective pricing and unit sales reflecting the prior-year quarter performance of Frozen internationally and Marvel’s Captain America: The Winter Soldier worldwide, partially offset by Marvel’s Avengers: Age of Ultron and Cinderella in the current quarter. These decreases were partially offset by lower per unit costs as well as decreased marketing spending in the current quarter.

     

    Consumer Products

     

    Consumer Products segment revenue in the current year increased 12.9 per cent to $4,499 million as compared to the $3,985 in FY-2014. Segment Operating income increased 29.2 per cent in the current year to $1,752 million as compared to $1,356 million in FY-2014.

     

    The segments revenue in the current quarter increased 11.5 per cent YoY to $1,195 million from $1,072 million. Operating income for the segment increased 9.8 per cent YoY to $416 million from $379 million.

     

    Consumer Products operating income growth was due to higher merchandise licensing revenue reflecting the strength of Frozen, Avengers and Star Wars Classic merchandise.

     

    Interactive

     

    Interactive segment revenue in the current year reduced 9.6 per cent to $1,174 million as compared to the $1,299 in FY-2014. Segment Operating income increased 13.8 per cent in the current year to $132 million as compared to $116 million in FY-2014.

     

    The segments revenue in the current quarter reduced 4.1 per cent YoY to $347 million from $362 million. Operating income for the segment increased 72.2 per cent YoY to $31 million from $18 million.

     

    Interactive growth was driven by the ongoing success of the Tsum Tsum mobile game and lower product development and marketing costs, primarily at Disney’s mobile businesses, partially offset by lower operating income from Disney Infinity console games.