Meanwhile, Disney shares have been taken a tumble this
week though, the company posted more than expected subscriber
editions in their last quarter. It missed estimates on
both revenue and earnings per share. So here to
break it all down for us to bring in Senior
reporter Michelle Castillo, who's joining me right here in
studio. Michelle, good to see you as always
. So we know sort of the change has things
have changed in terms of how Wall Street assesses these
streamers, netflix and others no longer. That's sort
of the subscribers, it's more how much money you're
generating out of them. Do you think investors are
sort of weary of Disney at this time? You
know, that's actually really funny because last quarter Disney
was like, don't look at our subscriber numbers,
look at our revenue and earnings per share. And
with the Big Miss this year they're expected to earn
50 cents a share. They actually only earned 30
cents on an adjusted basis, missed on revenue by
I think about a billion dollars. Um, you're
seeing the fact that the investors are doing exactly what
Disney told them they're looking and seeing that they're not
making as much revenue and you're gonna see other Divisions
like the Parks Division, that revenue increased 34% year
over year, streaming revenue is up as well.
But everything is costing Disney more. So creating content
is costing Disney more. This last quarter cost them
$1.5 billion 800 million. So everything is doubling in
costs. They are increasing, but not at the
rate of what it's costing them. And she actually
said in a call with investors that this isn't going
to slow down in 2023. No, so let's
go through some of the numbers. Disney Plus added
12.1 million subscribers. That was above estimates, which
was basically about eight million. But you almost see
like Disney having the same problem that netflix has where
you top out at a particular number, the turn
rate changes every month. People are canceling their subscriptions
. But then what happens then for the future?
How do you sort of base success then? Here
? You know, it's good news for Disney,
Let's compare it to netflix this quarter. They only
added 2.4 million subscribers. So Disney is winning overall
, they are third place when it comes to streaming
subscribers. You have netflix amazon prime, which I'll
put in there even though a lot of people buy
that for the prime membership. And then Disney,
so I still think there's room for them to grow
on december 8th. They're adding that ad supported tier
, which is at the current price of the non
ad version of Disney Plus. So that might still
keep people in the Disney plus family. But again
, to draw people in, they're going to have
to pay for more content and a lot of people
thought that Mark and Star Wars would be enough to
draw in new viewers, but according to parrot analytics
actually, interest in Disney originals has declined about 9%
year over year. So those two franchises aren't enough
just to bring everyone in. They're gonna have to
create hits, they're gonna have to create content.
I mean there's good news about and or which is
the Star Wars series that's out, but they don't
put out as much shows as netflix does as some
of their other competitors. So this is something they're
gonna have to invest in. And that's what I
think investors are worry about even though they're still confident
that the company can turn Disney plus profitable by 22
. Yeah, I don't even think one Disney show
cracked the top 10 in the Nielsen streaming numbers this
last week, so it just kind of shows the
sort of headache. Let's go back to the parks
because you brought that up because that's obviously supposedly a
bright spot for Apec who used to run the parks
for Disney, but now they've got shanghai. Disney
closed since october 31st because of Covid lockdowns. You've
got Disney world being affected by tropical storm Nicole here
. Who, I mean, all intensive purposes.
It doesn't seem like that's going to be as bad
as a storm, but who knows how long that's
going to impact profit for revenue for those parks here
. And is that going to be happening in the
next quarter? Is that going to really hurt them
? Well, I think a lot of people think
Covid is at least not, may be over,
but at least that we've dealt with it. But
in a lot of regions in the world, especially
china, it's still a very major factor. And
you're seeing shutdowns just mentioned shanghai Disney that just reopened
on june 30th and it was closed since March.
Now it's closed again. They finally got one full
quarter basically of of shanghai Disney open, which is
why I think you're seeing record profits. Disney is
saying that when people do go to the parks,
they are spending more on food and merchandise, they
are staying longer. They are spending on cruises.
But as the winter months increase, we know flu
season's here. We know that Covid gets more rampant
in the colder months. I think there is a
concern that this is really gonna affect the parks division
. So while the brights now going forward, they
want to build in some seasonality and if this is
something for them going forward, think about how much
it costs to operate a park. If they can't
operate a full year, then it's a big loss
for this company. And that's something that they didn't
have to deal with even just like five years ago
. Yeah, it's such a good point. Let's
go to one area that will likely be a bright
spot for them and that's going to be theatrical releases
because they've got a lot coming up and a big
one that is out right now in Black Panther Wakanda
forever. Don't forget of course they also have with
the blue avatar avatar. Thank you. That's coming
out, which is the highest grossing film ever.
But Black Panther Wakanda forever. The first one had
$200 billion in its opening box office release. It's
going to get anywhere close to that, potentially.
Probably not to 200 million, but you have to
think that's no doubt a bright spot for Disney this
weekend. Yeah, I was able to see a
screening of it with Dolby Atmos and it was amazing
. Um I really highly recommend that everyone watches it
. It was a great movie. I think Disney
is going to get a huge box office total for
this movie. There is one caveat that I kept
thinking about this movie is definitely more serious than the
original. Black Panther. It deals with Chadwick bozeman's
death. Um and it does deal with it in
a very, very polite and respectful way. I
was very impressed with the way they handled it.
However, I question how family friendly this will be
for really younger audiences. The first black panther really
, you could bring the whole family, this deals
with a lot of serious themes of loss and grief
. They do it very well but I just wonder
if it's still going to have that draw that it
did when its original one. I do think we're
gonna see more adults go. You're gonna see a
lot of people go more than once. It is
a very emotional film. It's two hours and 45
minutes. But I do question how you know traditionally
the rated R movies, this isn't rated R.
But the higher rated movies don't do as well in
the box office as movies that are more family friendly
. So I question that. But with avatar coming
, I do think that Disney has a good slate
of movies coming in. This is good news for
them. I think that's gonna go up. It's
gonna reinvigorate the marvel franchise which has been a little
shaky with some of the movies starting with Black Widow
. But also I think in the end of the
day we are going to see Disney bringing in the
dollars at the box office. This could be also
good for companies like AMC which was hit pretty hard
with, they had a loss per share again for
the second straight quarter. So I think this is
going to be good news for the theaters. I
mean if it gets anywhere close to 200 million,
that would be the best box office performance of the
year. Um good to have you here in studio
Michele Castelli. Oh thank you so very much