M+E Connections

Disney is “nearing full production levels” once again and is “significantly ramping up content creation at our studios,” according to Bob Chapek, the company’s CEO.

The company had shut down several productions at the start of the pandemic early last year and then slowly started productions again a few months later.

Disney’s 20th Century Studios and Searchlight Pictures divisions, as examples, are “gradually increasing output and will reach a steady slate of 15 and 20 films, respectively, to fuel our general entertainment offerings across all of our distribution platforms,” Chapek said May 13 on an earnings call for Disney’s second quarter (ended April 3).

The company will, meanwhile, continue to use three different release approaches for its films for the time being, on a case-by-case basis: traditional exclusive theatrical releases, releases in theaters with a simultaneous offering via Disney Plus Premier Access (at a cost in addition to the price of a Disney Plus streaming subscription), and releases straight to Disney Plus, he explained.

For example, Cruella, starring Emma Stone, will be released in theaters and Disney Plus Premier Access on May 28.

“Amidst recent signs of increased consumer confidence in moviegoing,” the company will release the 20^th Century comedy Free Guy, starring Ryan Reynolds, and Marvel’s superhero Shang-Chi and the Legend of the Ten Rings with a 45-day exclusive theatrical window on Aug. 13 and Sept. 3, respectively, Chapek told analysts.

For now, about 90% of domestic U.S. theaters are open again and Disney is “encouraged in terms of polling” that will be “growing going forward,” he said during the Q&A. But there is still a long way to go. If you look at this past weekend’s box office and compare it to the last three years of pre-COVID box office, dollars were 85% lower this past weekend domestically and 67% lower internationally, Chapek noted.

Disney continues to be “pleased with the growth and engagement” for the Disney  Plus and, outside the U.S. in select markets, Star streaming services, he also said.

Disney Plus had attracted a total of almost 104 million total paid subscribers  globally by the end of Q2 and the company is “on track to achieve our guidance of 230 [million] to 260 million subscribers by the end of fiscal 2024,” he told analysts. The 103.6 million paid subscribers Disney cited in its earnings news release were  up from 33.5 million a year ago.

Meanwhile, Hulu had 41.6 million paid subscribers and ESPN Plus 13.8 million paid subscribers at the end of Q2, he said. That was up from 32.1 million and 7.9 million subscribers, respectively, a year ago.

Hulu paid subscriptions were up from 39.4 million at the end of Q1, Disney CFO Christine McCarthy told analysts. However, Hulu Live TV subscribers dipped to 3.8 million from 4 million, she said, chalking it up mainly to a $10 price increase implemented in December and “modest impact from seasonality.”

Disney had said at its annual meeting in March that Disney Plus paid subscribers reached 100 million globally, she noted. Therefore, the company had added subscribers at a faster pace in the last month of Q2 than it did in the first two months of the quarter, she said. That was despite there being no new major market launches, a prince increase in the Europe Middle East Africa region and a domestic price increase at the end of the quarter, she noted.

Although Disney Q2 revenue fell to $15.6 billion from $18 million a year ago,  income from continuing operations grew to $912 million (50 cents share) from $468 million (26 cents a share). Disney Media and Entertainment Distribution revenue inched up to $12.44 billion  from $12.37 billion.