Disney has taken advantage of the pandemic to overturn its content strategy… without having an impact on its business structure. The entertainment giant announced a few days ago that Disney Plus, its streaming platform, already exceeded the barrier of 137 million users worldwide. Everything, moreover, in just over two years of travel and shortly after Netflix announced its first drop in customers in a decade.
the health of Disney Plus is clear, with more and more series of the Cinematic Universe of Marvel and of starwars as a vehicle with which to exploit and retain subscribers. But it is also that, if we add the brands of the Disney conglomerate, which are also presented as separate platforms in some markets (ESPN +, Hulu or Star), exceeds 200 million customers, the round figure that until now had only been available to Netflix.
The commitment redoubled by streaming with films that arrived at their services without hardly going through the cinema or directly without doing so It was an obvious response to the pandemic. A decision of a single path in many ways, controversial and complex that, however, has turned out well.
And it is that Disney announced in its latest results that during October and December 2022 entered a total of 21,819 million dollars34% more than in the same period of the previous year, of which he obtained 1,104 in profit.
But, The most important thing about its figures is that its Parks, Experiences and Products business leg (from DisneyWorld to Disney Land), reached $7.2 billion. A little less than the first quarter of 2020. That is to say, they have managed to save the role of this business that depends yes or yes on people attending in person and that had come into check during the hardest time of the pandemic. In addition, not only that, but it seems that people have come back with enthusiasm, and that is that their income per visitor in this division has grown by 40%.
‘Watch my movies, wherever, what I want is for you to come to my parks and buy merchandising’
The improvement of the Disney parks is not trivial for the mouse house Since, although it seems that its income from movies and series should be the ones that rule, its biggest and most lucrative business has been the parks and their products in recent decades. The disney experience.
Your sales cycle is simple: create characters, stories and movies and series that they don’t care where you see them —although the more profit the better, of course— while you watch it, so that later we can buy and go see its attractions. Hence its significant investments in parks such as Orlando, California, Shanghai, Tokyo or Paris; where, however, despite celebrating three decades this year, it has always been its least profitable park.
To get an idea, the company, which will be 100 years old in 2023, owed more than 40% of its income to Parks and Products before the pandemic and was the most profitable, a percentage that plummeted in 2020 and has recovered to now assume 33% again and rising, only below its media output. In other words, if we were to stick with the most profitable, Disney is an amusement park and toy company..
The divisions of the Disney business
Since 2021, due to the pandemic and the growth of streaming, Disney has reorganized its reportable business segments in its results.
The company now operates through two main business segments: Disney Media and Entertainment Distribution (DMED) and Disney Parks, Experiences and Products (DPEP).
The first of these segments, made up of the media and Disney entertainment, is further separated into three components: Linear Networks (TV and movie channels); Direct to Consumer (Streaming); and Sales of Content/Licenses and Others (sale of rights to third parties).
Among those that grew the most, of course, are its streaming platforms —not only Disney Plus— with revenues of 4,700 million dollars in the first quarter of fiscal year 2022, 33.8% more than in the same period of the previous year.
But let’s go with your division of Parks and Experiences: This is made up of theme parks and tourist complexes in Florida, California, Hawaii, Paris, Hong Kong and Shanghai. It also includes a cruise line and a vacation club. Revenues are derived primarily from the sale of theme park tickets, food, beverages, miscellaneous merchandise, resort stays and vacations, and intellectual property licensing fees.
The Parks, Experiences and Products segment posted revenue of $7.2 billion in the first quarter of fiscal year 2022, an increase of 101.6% from the previous quarter.
So maybe when you go back to the cinema to see a Disney movieor renew your subscription to Disney Plus next time, think that everything is a huge funnel so that at some point in your life you spend thousands of dollars or euros on a vacation in its parks. Think about it: compare a month’s fee for a streaming platform or a movie ticket.