Friday February 12th 2021
Streaming business is booming
Disney is fighting its way out of the red
The corona pandemic is hard on Disney. But the media group seems to be slowly recovering. The streaming business in particular is making the tills ring properly.
The corona crisis continues to weigh heavily on Walt Disney, but the streaming business is booming and the entertainment giant is back in the black. In the three months to the end of December, Disney made a bottom line profit of 29 million dollars, around 24 million euros, as the US entertainment company announced on Thursday after the US market closed.
While that's a 99 percent year-over-year decrease, it exceeded expectations. In the previous quarters there had always been high losses because the pandemic had paralyzed large parts of the Disney empire.
The big success story for the Hollywood giant remains the streaming business for the online video service Disney + in the Corona crisis. In the past quarter, the Netflix rival, launched in November 2019, gained over 21 million subscription customers – at the beginning of January there were already 95 million paying users. Market leader Netflix recently had almost 204 million, but has been around for much longer and is represented in many more countries. In addition, limited-term lure offers expired on a large scale at Disney +, which makes the strong growth all the more impressive.
The quarterly figures were well received by investors, and the share reacted after the trading hours with significant price gains. Revenues fell compared to the same period last year by 22 percent to 16.2 billion dollars. Disney's amusement parks, holiday resorts and cruises – reliable profit makers in normal times – were crippled by the pandemic and suffered a 53 percent drop in sales. Disney estimated the special charges for the division caused by the Corona crisis at an immense 2.6 billion dollars for the past quarter alone.
Despite the streaming boom, there was also a five percent drop in sales in the TV and film sectors. The other online services are also flourishing – in addition to Disney +, the group also operates Hulu and an Internet edition of the sports channel ESPN. According to its own information, Disney recently had more than 146 million paying customers across all streaming offers. But the division also includes Hollywood studios and the classic cable business, where considerable compromises have to be made in the Corona crisis. Even so, the division's operating profit declined two percent to $ 1.5 billion.
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