The media conglomerate Disney published its quarterly results on Wednesday. This is the first report published by the company after they announced the new reorganizations that will take place in the company.
The quarterly reports from the company show that it has missed the estimated mark by a small number. The quarterly report from the company also suggests that the losses from the streaming platform of the company have also narrowed down.
Disney brought in different changes in their operations in order to facilitate the reported cost-cutting this year, which is expected to be around $5.5 billion.
The quarterly report published by the company was the first one since the company announced its reorganization.
The company intends to re-align its vast business through the new three-pronged business strategy – Disney Entertainment, ESPN, Disney Parks, Experiences, and Products. The new business reorganization of the company is expected to be fully operational under the guidance of the company’s CEO Bob Iger later this year.
While the streaming platform of the company faced a few setbacks following the recent changes that were made in the availability of the content on the platform, the theme parks under the ownership of the company reported a very strong performance in the quarterly report.
Among the Disney theme parks, the international parks stood a level above the rest in generating a considerable profit for the company. The overall revenue generated by the theme parks alone is estimated to be around $2.17 billion.
It should be noted that the parks were able to generate a massive number in terms of revenue even amidst strong competition from both similar ventures.
One of the most notable improvements for the company in regard to revenue loss was that of its online streaming platform Disney+. The loss of the platform was expected to be behind, considering the recent changes and the price hike that were implemented.
But the loss from the streaming platform was reported to have narrowed down to $669 million in the second quarter. Even though the number seems high, the expected number for the loss of the platform was thought to be above $850 million.
The reduction in the loss for the company from the streaming platform came down from $887 million around the same time a year ago. The streaming loss reported by the company in Q1 was around $1.1 billion and in Q4 was around $1.5 billion.
In a statement following the release of the quarterly report of the company, Bob Iger, the CEO of Disney said that they were very pleased with the accomplishments that the company had made in the quarter and were also impressed with the improvements that were visible in the streaming platform of the company.
He said that the positive changes in the business were a reflection of the new strategic changes that were introduced in the company.
He also added that the company tries its best to deliver the most to its customers from movies to television to sports and also in theme parks, also while trying to establish a more efficient and coordinated approach in its business operations.
Following the release of the second quarter;y report of the company, the shares of Disney saw a sudden decline in their values by about 2%.
Bob Iger took charge of Disney as the CEO in November 2022 and since he took charge as the CEO of the company, Iger has focused more on profitability as the investors became more concerned about the margins of the company rather than the growth in its subscriber count.
The direct-to-customer services offered by Disney like Disney+, Hulu, and ESPN+ have reported a large loss in the past years and Iger was concerned about the numbers.
Ever since he took charge, Iger introduced different policies with the major aim to establish new revenue systems for the company. The recently introduced ad-supported tier of the company is an example of this.
There had also been a few price increases for different services from the company in order to balance off the losses and also to make a significant difference in metrics like ARPU which is short for average revenue per user.
The reports and numbers from the company records suggest that the new changes introduced at the comp[nay has a positive effect on its overall outcome. In Q2 202, the domestic average revenue per user of Disney+ saw an improvement of around 20%, to reach a sum of $7.14.
The previous quarter’s report of the company showed that the domestic ARPU is around $5.95. The CEO of the company Bob Iger shared his hopes for the company to reach streaming profitability by the end of the year 2024 and the company has also started different strategies to achieve this result.
Even though there have been a few notable positive changes for the company in recent times, the road to profitability from streaming platforms will not be an easy one for Disney.