Disney's Problems Deepen

Media

Published: May 11, 2023 7:30 am

Forget about Disney amusement park problems in Florida. Walt Disney Co. (NYSE: DIS) has become a prime example of how treacherous the streaming media business is now. Should companies aim for an increasingly larger base of subscribers or higher rates for each subscriber they have? Disney has problems with both. (These companies are planning the biggest mass layoffs this year.)
[in-text-ad]
Wall Street punished Disney for its latest earnings. Relatively new CEO Bob Iger has not turned the company around. Instead, he has laid off workers and said he is working on Disney’s problems. The work, so far, has not been successful.

Reuters reported, “Walt Disney Co reduced streaming losses by $400 million from the prior quarter but also shed subscribers.” Indeed, what Disney calls “direct to consumer” had revenue of $5.5 billion, up 12%. However, it lost $659 million. Disney streaming subscriptions dropped to 157.8 million from 161.8 million. Monthly revenue per subscriber rose 12% to $6.47.

Iger envisioned streaming as Disney’s future the last time he was CEO. Disney+ launched in November 2019. Disney’s management wanted it to rival Netflix and Amazon Prime Video in size. Disney+ grew like a weed but lost money every step along the way. Iger had managed to trade rapid growth with low consumer pricing. How low? For example, Netflix’s Standard service costs $15.49 per month. As Disney raises subscription prices, it is likely that more subscribers will leave.

24/7 Wall St.
Everyone Recognizes These 50 American Company Slogans

Disney’s ancient Disney Parks, Experiences and Products segment did well. It had revenue of $7.8 billion, up 17% from last year. Operating income rose 23% to $2.2 billion. Disney’s trouble in Florida is unlikely to dent that progress.

Iger can cut costs all he wants. He thought the streaming business was attractive, and it was not.

Are You Still Paying With a Debit Card?

The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.

Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!

Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!

Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.