12

August, 2021

Disney (DIS) 21Q3 Earnings Preview

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Disney (DIS) 21Q3 Earnings Preview

Disney is a monster of a company. While we don’t comprehensively cover this entertainment giant, we do have insights into two critical pieces of its story:
  • Streaming (Disney+, ESPN+, Hulu)
  • Parks (Mentions of visiting a Disney Theme Park)

Disney+ Shows Solid Retention, Slowing User Growth

Last quarter, Disney’s report was somewhat disappointing.
 
Disney+ subscriber counts missed estimates (103.6 million vs. 109 million expected) and ARPU dropped -29% YoY to $3.99 because of the impact of Disney+ Hotstar, a cheaper membership model in international markets.
 
LikeFolio data shows this user growth cooldown has continued in the current quarter.
But while Disney+ subscription growth is dropping, so is the rate of consumer cancellations.
 
This retention can be attributed to high levels of consumer happiness, and new content.
 
Disney+ ranks at the top of the pack when it comes to sentiment, near 78% positive. Netflix is a close second at 76% positive.
Some of this new content includes direct-to-streaming releases. Disney+ released Black Widow (an additional $30 on top of existing subscription costs) with streaming success. Disney+ Premier Access purchases of Black Widow grossed $60 million during the film’s opening weekend, and this performance is the catalyst for a recent lawsuit.
 
Key Takeaway: Disney is leveraging content to keep eyeballs on its screens, but growth continues to cool in English-speaking markets.
 
While streaming is stable, many investors will be watching for improvements in Disney’s Parks segment.

Disney Park Attendance is Improving, Still Lags 2019

LikeFolio data suggests consumers are increasingly visiting Disney Parks but this behavior has not normalized to pre-covid levels.

The massive pent-up demand surge upon FL parks reopening last July makes YoY comparisons tough, but you can see the improved trendline, +19% QoQ.

Investors will be listening closely to guidance on this call, to understand the impact of the Delta variant moving forward.

Disney loosened mask guidelines in June, but has since reinstated its indoor mask policy.

LikeFolio data does not show major fear-induced shifts in consumer behavior…yet. But the bar for improvement is higher than last quarter. 

Disney reports 21Q3 earnings August 12 after the bell.

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