As a long-time Disney enthusiast with a lifetime of memories created within their magical kingdom, I am thrilled to see Hugh Johnston’s conviction about Disney+ as the company’s most strategic asset. With a family that has grown up alongside Mickey Mouse and friends, I can vouch for the immense value this streaming platform brings to our household, not just as an entertainment source but also as a gateway to all things Disney.
Discussing expansion, Disney’s Chief Financial Officer, Hugh Johnston, considers their primary streaming service to be their most valuable treasure.
Johnston considers Disney+ to be our current key strategic advantage,” is a simpler, more natural way of saying his original statement.
On Monday, during his talk at the UBS Conference in New York, Johnson emphasized the 175 million users spread across Disney+ and Hulu, and underscored the advertising and consumer segmentation advantages that this streaming service offers Disney.
As a gamer, I’m excited about the prospect of having Hulu content and an ESPN tile on Disney+. This could make Disney+ a one-stop-shop for all things Disney, a go-to entertainment hub if you will. Particularly, the ESPN tile is designed to keep me from switching platforms, acting as a barrier against churning away from Disney+.
He suggested that what’s essential at home is someone who serves as a ‘objector,’ someone who says, ‘No, we can’t shut it down.’ This person could be a viewer who enjoys various types of content, such as general entertainment, children’s movies, sports, or news.
The tile is designed to familiarize consumers with locating ESPN on Disney+. Nevertheless, Johnston stated that the main ESPN offering, set to debut in early fall 2025, will be a distinct product compared to the tile. It will encompass ESPN betting, fantasy sports tracking, and e-commerce related to sports, rather than simply providing sports content.
Inquired about the recent surge of creative accomplishments at the studio, including movies like “Inside Out 2” and “Deadpool & Wolverine”, along with streaming series such as “Shogun”, Johnston attributed it to the modifications Bob Iger introduced when he resumed his role as CEO in terms of creative production.
In simpler terms, Johnston stated that not many individuals can produce content for streaming services at high speeds without compromising quality. When they were pressured to work faster, the quality suffered noticeably, and this was evident in both box office results and TV ratings. When Bob returned, one of his realizations was the need to improve the overall quality, and a way to achieve that is by reducing the pace at which we produce quantity.
Disney has announced that they will invest approximately $24 billion on content next year. Regarding future content spending, Johnston considered $24 billion a reasonable amount, but hinted at a slight increase in international streaming over the coming years, as Disney might produce some locally-focused programs.
Another significant advantage Disney holds is their extensive network of theme parks and cruise lines. Over the next decade, they’re planning a $60 billion investment, which will see the creation of new areas and attractions across all their parks. This expansion is expected to boost attendance and allow for higher ticket prices. Johnston emphasized that Disney needs to tread carefully with price hikes at their parks, as their aim is to encourage repeat visits by consumers. Price increases usually occur in premium offerings and additional services like the Lightning Lanes, which let visitors bypass queues.
Despite a decrease in park attendance during the summer and disruptions caused by two hurricanes near Walt Disney World, consumer confidence seems to have recovered. Disney has factored in a potential drop in attendance due to the opening of Universal’s Epic Universe in May 2025. However, Johnson mentioned that advance bookings for next summer at Disney are higher compared to the same period last year. Additionally, he noted that traditionally, the opening of new parks in the Orlando area tends to increase overall attendance.
Currently, things appear to be going well for our consumer. This gives us a sense of reassurance, and we have a clear view of the situation, especially regarding our guide, Epic. In fact, we’ve intentionally added some potential setbacks to it. However, whether these challenges will be as substantial as anticipated is yet to be determined. Nevertheless, we took a cautious and prudent approach in our forecasting.
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2024-12-09 23:54