Walt Disney Co on Tuesday reported that its quarterly earnings were hit hard as the COVID-19 pandemic emptied theme parks and cruise ships, while it hit a new milestone for streaming subscriptions.
The entertainment colossus said it lost US$4.7 billion on revenue of US$11.8 billion — about half of the amount of money it took in during the same period last year.
“Despite the ongoing challenges of the pandemic, we’ve continued to build on the incredible success of Disney+ as we grow our global direct-to-consumer businesses,” Disney chief executive officer Bob Chapek said in an earnings release for the quarter that ended on June 27.
Photo: AP
The company has more than 100 million paid subscribers in what Chapek touted as a “significant milestone” affirming the company’s move to streaming its coveted content direct to homes.
That includes about 60.5 million for Netflix Inc rival Disney+ along with about 35 million for Hulu and 8.5 million for its ESPN+ sports service.
Earnings in the fiscal third quarter were hurt by the pandemic, with Disney’s theme parks, resorts and cruise ships closed or operations suspended, the California-based company said.
“The most significant impact in the current quarter from COVID-19 was an approximately US$3.5 billion adverse impact on operating income at our Parks, Experiences and Products segment due to revenue lost as a result of the closures,” the company said in a statement.
Disney also reported higher costs to launch its online services.
“Despite the harsh realities we are facing today, we have made some encouraging progress,” Chapek said on an earnings call.
“We’ve begun a responsible phased reopening of our parks in Shanghai, Paris, Tokyo and Orlando, as well as our shopping and dining area, Downtown Disney, in Anaheim,” California, he said
Theme park reopenings have involved new health and safety measures, including a mandatory mask policy, temperature screenings and capacity restrictions to promote social distancing, Chapek said.
Disney executives said some television and film production has restarted, and that the return of professional sports matches promised to return ad revenue to its ESPN arm.
Disney’s much-delayed blockbuster Mulan would skip the big screen and premiere on the streaming platform Disney+ next month, as the novel coronavirus keeps theaters shut across much of the US, Chapek said.
The unprecedented decision — described by Chapek as a “one-off” for a Disney blockbuster — is the latest major blow for movie theater chains already reeling from the pandemic.
Mulan, a mega-budget live action remake of the tale of a legendary Chinese warrior, would be available from Sept. 4 in homes to Disney+ subscribers for an additional US$29.99.
“We see this as an opportunity to bring this incredible film to a broad audience currently unable to go to movie theaters, while also further enhancing the value and attractiveness of a Disney+ subscription,” Chapek said.
The film would launch simultaneously in theaters in territories, such as China, which do not have currently announced Disney+ launch plans.
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