Disney+ racks up over 54MN but House of Mouse dealt blow in Q2 | Major Businesses | Business | News | Rapid TV News
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While conceding that the Covid-19 pandemic has had an appreciable financial impact on a number of its businesses, the Walt Disney Company has reported a second quarter where growing revenues from media and direct-to-consumer business have been offset by significant losses elsewhere.
Disney 24Mar2020 2
Yet bullishly, the company, with recently appointed chief executive officer Bob Chapek at the helm said that it was confident in its ability to withstand this disruption from Covid-19 and emerge from it in a strong position. It particular the company was buoyed by what it called the ‘extraordinary response’ to Disney+ during Q2 and going forward.

For the quarter ended 28 March 2020, The Walt Disney Company reported revenues of 1$8.009 billion, up 21% compared with the end of the same quarter a year ago, and for the first six months of the year racked up revenues of $38.867 billion, an annual rise or 29%. Yet when it came to net income it was a story of reverses for the quarter and the half year. Net income for Q2 2020 fell 91% on an annual basis to $475 million and for the six month ended 28 March 2020 net income was $2.608 billion, down 68% year-on-year.

Assessing the reasons for the overall performances, Disney said that the Covid-19 hits were taken mostly in its Parks, Experiences and Products business line and through shortened or cancelled theatrical releases and suspended stage play performances at Studio Entertainment as well as advertising sales impacts at Media Networks and Direct-to-Consumer & International. And the company also experienced disruptions in the production and availability of content, including the cancellation or deferral of certain sports events and suspension of production of most film and television content.

Looking at Direct-to-Consumer & International, revenues for the quarter increased from $1.1 billion to $4.1 billion but segment operating loss increased from $385 million to $812 million. The increase in operating loss was due to costs associated with the launch of Disney+ and the consolidation of Hulu which since 20 March 2019 has had 100% of its revenues and expenses included in the Direct-to-Consumer & International segment.

Looking at the division’s paid subscribers, that is for Disney+, ESPN+ and Hulu, as of 28 March 2020 Disney+ had 33.5 million subs, ESPN+ 7.9 million, Hulu SVOD-only 28.8 million and Hulu Live TV+SVOD with 3.3 million customers. Yet during the earnings call for the second quarter results, the Walt Disney Company said that Disney+ had reached 54.5 million subscribers by 4 May, boosted considerably by its 24 March launch in a number of key territories in Europe. Growth in TV/SVOD distribution results was also said to be due to sales of content to Disney+ driven by The Lion King, Toy Story 4, Frozen II and Aladdin. As ever though, the SVOD was The Mandalorian which continued its stellar performance.

Drilling down, Disney revealed in the quarterly report that its Media Networks revenues for the quarter increased 28% to $7.3 billion, and segment operating income increased 7% to $2.4 billion. Cable Networks saw a 17% annual increase in revenues to $4.445 billion for the second quarter and 18% rise for the half year to $9.211 billion. Broadcasting revenues for the quarter increased 49% to $2.8 billion and operating income increased 53% to $397 million.