Speaking on an investor conference call for Q1 financials, Robert A. Iger, chairman and CEO at The Walt Disney Company, said that direct-to-consumer “remains our number one priority.”
Iger continued, “We remain focused on the programming, as well as the technology, to drive the success of our DTC business. We’re thrilled with the continued growth of ESPN+.”
ESPN+ has 2 million paid subscriptions, Iger said, “double the number from just five months ago.”
“Presented with an overabundance of choice, consumers look to brands they know to sort through the options and find what they actually want. The DTC space is no different in that regard, and we’re confident that our iconic brands and franchises will allow us to effectively break through the competitive clutter and connect with consumers. We’ll also use our brands to help subscribers quickly navigate the content on Disney+, creating an efficient interface that enhances their experience and their affinity for the service.”
Revenues at The Walt Disney Company for the first quarter were stable at $15.3 billion, delivering a net profit of $2.8 billion.
Media networks revenues were up 7 percent to $5.9 billion, with the division posting an operating income of $1.3 billion. The cable networks were up 4 percent to revenues of $4 billion, but operating income fell due to a decrease at ESPN and Freeform, partially offset by an increase at the Disney Channels. Broadcasting revenues rose by 12 percent to $1.9 billion.
The parks, experiences and consumer products segment also showed gains, with revenues rising by 5 percent to $6.8 billion and profit up 10 percent to $2.2 billion.
Direct-to-consumer and international revenues slipped slightly to $918 million but the division’s loss grew to $136 million as the company invested in ramping up ESPN+ and in building its upcoming Disney+ service. Speaking on a conference call, SVP and CFO Christine McCarthy said that the company’s operating income for fiscal 2019 would fall by $150 million as a result of lower licensing fees from holding back its content for its own service. Captain Marvel will be the first film withheld from the company’s output deals with other platforms.
Studio entertainment revenues fell by 27 percent to $1.8 billion and profit dropped by 63 percent to $309 million. Lower operating income was due to a decrease in theatrical distribution results, partially offset by growth in TV/SVOD distribution.