“Questions persist about how ESPN will stem the flight of subscribers from traditional cable television packages, losses that were pegged last year at 2 million paying customers for the fiscal year ending last October”, Variety reported.
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Zacksoffers analysts with an Average Broker Rating (or ABR), basing it on sell-side recommendations.
Some of ESPN and Disney’s resistance was just executives being tone deaf to changing tides.
Here’s a look at Disney’s evolving realities. “The decrease in operating income was due to a decrease at ESPN”, according to a press release from Disney. Here are 5 key statistics from this just announced report below. The bottom line beat estimates of $1.49 per share, but the top line came short of expectations for $15.26 billion.
Shares of Disney fell 2.1 per cent to US$106.71 in extended trading after the announcement.
Media networks saw its revenues dip 2 percent to $6.2 billion and segment operating income was down by 4 percent to $1.4 billion.
Disney is stuck a little bit here because programming costs are rising for the National Basketball Association and NFL, but advertising revenue is falling off as people cancel out of their subscriptions.
So Disney has been working hard to adapt to the new realities of online TV watching.
Iger also mentioned that Disney “will be launching a direct-to-consumer sports service sometime in probably calendar 2017”, but little else was said about it. For one thing, Disney has signed billion dollar deals with Netflix to allow the streaming service be the exclusive home to Disney – and all of its subsidiaries – properties after they’re released from theaters. He did not offer more details about the opening date.
“We are combining the unmatched power of the Disney-ABC portfolio of brands, franchises and shows to create a one-stop shop for our advertising clients”, said Disney-ABC President Ben Sherwood in a statement. But he said ultimately it is Disney’s “powerful intent to go out there aggressively with digital offerings directed to consumers for ESPN” and other Disney offerings.
Iger also announced that Disney World’s other blockbuster project, Star Wars land, will open at Hollywood Studios in 2019.
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Speculation has been swirling whether Iger will extend his contract in June. Late past year, the company revealed it would open in “summer 2017”, but the Disney Parks Blog confirmed the exact date today.
