What’s Going On Here?Entertainment giant Disney reported worse-than-expected earnings late on Wednesday, thanks to a – ahem – Minnie audience subscribing to the Mouse House’s magic movies. What Does This Mean?Disney’s streaming service – Disney+ – had a roaring time during the pandemic, as locked-down fans were pushed out of the entertainment giant’s theme parks and towards their screens instead. But that’s slowing down now: Disney+ added just two million subscribers last quarter – its smallest quarterly gain since launching two years ago – bringing its total count to a lower-than-predicted 118 million.
Things aren’t much better for Disney’s big screen business either: high marketing costs meant its film studio made a loss last quarter. And, sure, vaccinated vacationers have headed back into Disney’s theme parks, but the segment’s profit still came in below expectations. Overall profit, then, came in lower-than-expected too, so investors initially sent its stock down 4%. Why Should I Care?The bigger picture: Misery loves company.
Lockdown’s streaming boom is fading fast, and industry giants are struggling to attract new subscribers – especially in mature markets like the US and Canada. Look at Netflix: it brought in just 88,000 North American subscribers this year, versus the three million and six million it added in 2019 and 2020 respectively. Plus, with the industry getting even more competitive, streaming services are having to fork out more than ever on marketing and content production to lure in new subscribers and keep existing ones around. And those increased costs won’t help their bottom lines…
Zooming in: Mickey’s going Meta.
Good thing, then, that Disney’s got its iconic gloved fingers in many pies: it announced plans this week to build its own “metaverse”, a virtual reality experience that companies like Facebook are already investing in (tweet this). Disney reckons it's got strong enough brands and characters to get customers interested, but it might be a while until the virtual magic arrives: the company’s yet to spell out any specifics about its venture. | 