Walt Disney Company Q3 Earnings Report

[Farro]

That's it. This could lead to a Disney++ or whatever catchy marketing term they come up with. I think they will make a new tier(s) for subscribers (basic/plus/premium/ultimate/Thanos level).

I really want to see Mulan and the previews look outstanding, but this model gives us pause.

LIke Amazon.

I have Prime. Then within Prime I have (at a monthly fee) Shudder, Gods and Monsters and I think something else.

 

[sponica]

I think the worry for some is this will become more frequent and could lead to other things that would’ve probably been included in Disney+ to now be an up charge.

I guess I don't see the dark path here. The alternative is that the movie languishes forever waiting for a release (along with the merchandise) and from what variety is saying it's a rental...what's the difference between paying 20/25 bucks to comcast for trolls world tour and disney 30 dollars for Mulan? They're just cutting out the middle man. And while they dumped a couple other movies onto Disney + this summer, they can't just keep dumping movies onto Disney+ for free.

I also don't see this model working for the general movie going audience. I like going to the movie theater and I'd be hard pressed to spend money like this on a rental IF I can see it in a theater.

 

[Brianstl]

I don't see where the debt load is ever unmanageable under the schedule they laid out. The company - in normal times - is a cash generating machine.

On what basis do you imagine a bondholder / noteholder would call a bond/note prior to its scheduled maturity?

The debt load is big but it is very manageable, it is even manageable without the cash generating machines operating properly. They have plenty of cash on hand and have an additional $17.25 billion line of credit they can tap if things go really south. They made it clear yesterday that they have the cash on hand to pay off the securities that are coming due in the next six months without it impacting their ability to operate. The company isn't in as good shape as it was a year ago, but it is actually in better shape than it should be right now.

 

[HashberryOTG]

I don't like it because of the requirement to pay $30 AND keep a subscrription. I'd rather one or the other - not both.

I think for this, and folks that prefer media such as blue-ray, it's better to just wait until it's free. $30 is for early access to a paid stream, nothing more. If I had young-ish kids, I'd totally pay $30 to watch early. Not exactly seeing a lot of movies out right now for them to be excited about. For just my husband and I, no rush. Happy to wait until it shows up for free.

Just like any other releases on Disney+ (well, before COVID anyways). Movie goes to theaters. I pay the $ to see it now, or I wait until it shows up on Disney+. I never would have paid to see The Lion King, but I love my Disney+ sub so I can see it and lots of other stuff. I love being able to go back and re-watch things. If I cancel my sub, it's gone. If I cancel my Netflix sub, that stuff is gone. Streaming service is streaming service.

 

[anthony2k7]

this aged well, still a long way to go today before close

I said "I'm fairly sure of it" unlike some posters here who state their opinion is fact.

 

[TsWade2]

I guess this is bad news. How will the Disney Company survive?

 

[dlavender]

I guess I don't see the dark path here. The alternative is that the movie languishes forever waiting for a release (along with the merchandise) and from what variety is saying it's a rental...what's the difference between paying 20/25 bucks to comcast for trolls world tour and disney 30 dollars for Mulan? They're just cutting out the middle man. And while they dumped a couple other movies onto Disney + this summer, they can't just keep dumping movies onto Disney+ for free.

I also don't see this model working for the general movie going audience. I like going to the movie theater and I'd be hard pressed to spend money like this on a rental IF I can see it in a theater.

The difference is it's $37 vs $20, so almost double.

However, you get to keep it for longer. Not sure if it's going to be a month, 2 months, 3 months..... Depends on when free release happens. I'm guessing Christmas time.

Now, are you watching it everyday for 3 months? Probably not. However, its undeniable that you are getting it for way longer.

Now, Trolls wasn't going to be "free" anywhere in the same timeframe, so there was more exclusivity with that purchase.

The price isn't totally out of whack looking at the different advantages, but at the same time its risky, especially if you don't like it. $37 for a movie that you only watch once becomes a worse deal vs $20 for a movie that you only watch once.

Like I said, I'm fascinated to see how this one plays out numbers wise.

 

[dlavender]

I forget that they kind of did this with Onward.

Onward was in theaters for a few weeks, then Covid, then IIRC it went VOD for a few weeks and then D+.

However it was traditional VOD. Difference was the D+ free date was announced at the same time and I was always perplexed why people would pay $20 for something that would be "free" to them in 2 weeks. I wonder what the sales were for that?

 

[YesterDark]

Some of us purchase blue ray discs for sharing with family/friends that don't have access to my personal streaming accounts. This is a major issue I have with this Mulan experiment as I can't hand a disc/media to someone. By sharing the cost(s) of purchasing the discs, I dilute my actual cost(s).

So I don't see it as a win-win at all.

I don't like it because of the requirement to pay $30 AND keep a subscrription. I'd rather one or the other - not both.

I mean you can just wait until it's released on Blueray like any other movie. Did they say this D+ purchase will completely replace digital distribution that normally happens with a film?

 

[YesterDark]

I think the worry for some is this will become more frequent and could lead to other things that would’ve probably been included in Disney+ to now be an up charge.

People spend way too much of their time and brain power worrying about slippery slope arguments. If you think the D+ purchase is bad and not worth you money, then don't buy it. If enough people don't buy it, they won't do it again. (This isn't directed at you btw Ryan, just a general statement)

 

[hertamaniac]

I mean you can just wait until it's released on Blueray like any other movie. Did they say this D+ purchase will completely replace digital distribution that normally happens with a film?

That's the crux of my point. If they would release it directly on Blueray at the same time as digital distribution, but at different pricing I think the business model is more favorable. Stream at a reduced price so long as you keep on Disney+ platform, but own it on disc at a slightly higher price. Perhaps it is possible to appease multiple audiences simultaneously?

 

[YesterDark]

That's the crux of my point. If they would release it directly on Blueray at the same time as digital distribution, but at different pricing I think the business model is more favorable. Stream at a reduced price so long as you keep on Disney+ platform, but own it on disc at a slightly higher price. Perhaps it is possible to appease multiple audiences simultaneously?

That's not how any of this has ever worked. Any movie first has a theatrical release which is then followed up with a Bluray/Digital release for purchase or rental.

When Endgame came out in theaters did you have misgivings on the cost of tickets and instead bought it for $20 from Target? This purchase is replacing THEATER tickets, not digital release.

 

[firefly_ris]

I forget that they kind of did this with Onward.

Onward was in theaters for a few weeks, then Covid, then IIRC it went VOD for a few weeks and then D+.

However it was traditional VOD. Difference was the D+ free date was announced at the same time and I was always perplexed why people would pay $20 for something that would be "free" to them in 2 weeks. I wonder what the sales were for that?

Yeah I do wonder about that. I personally know 3 people who paid for it.

 

[hertamaniac]

That's not how any of this has ever worked. Any movie first has a theatrical release which is then followed up with a Bluray/Digital release for purchase or rental.

When Endgame came out in theaters did you have misgivings on the cost of tickets and instead bought it for $20 from Target? This purchase is replacing THEATER tickets, not digital release.

Disagree. There are a plethora of movies that never had a theatrical release and went directly to DVD/Blueray/Redbox.

Since this is being touted as a one-off, why not test the waters of direct to Blueray (DTB) with a DTC option via Disney+?

 

[Eric Smith]

Disagree. There are a plethora of movies that never had a theatrical release and went directly to DVD/Blueray/Redbox.

Since this is being touted as a one-off, why not test the waters of direct to Blueray (DTB) with a DTC option via Disney+?

They make all the money as profit on Disney+, they make significantly less than the full amount you pay for a Blu-Ray as profit.

 

[YesterDark]

Disagree. There are a plethora of movies that never had a theatrical release and went directly to DVD/Blueray/Redbox.

Since this is being touted as a one-off, why not test the waters of direct to Blueray (DTB) with a DTC option via Disney+?

In no way was Mulan ever a direct to DVD movie, the comparison is silly. This isn't The Little Mermaid 5, Journey to Shell Kingdom.

And why would they test the waters about just dumping this into the market direct to DVD? That's not a test, that's just giving up potential revenue. They already have estimates on Bluray/rental sales. I don't think the potential market is any different than normal release. Maybe a tick higher rental sales in today's environment.

The test is finding out how much money they can make by bypassing a theater release with a stream release.

 

[BrianL]

In no way was Mulan ever a direct to DVD movie, the comparison is silly. This isn't The Little Mermaid 5, Journey to Shell Kingdom.

Exactly. The estimated budget for Mulan (2020) is $200 Million! That was not intended to be straight-to-video.

I actually want to see The Little Mermaid 5, Journey to Shell Kingdom. They can skip 3 and 4 and just do that one.

 

[hertamaniac]

They make all the money as profit on Disney+, they make significantly less than the full amount you pay for a Blu-Ray as profit.

Of course, hence the reason I stated different pricing structures.

 

[YesterDark]

Exactly. The estimated budget for Mulan (2020) is $200 Million! That was not intended to be straight-to-video.

I actually want to see The Little Mermaid 5, Journey to Shell Kingdom. They can skip 3 and 4 and jsut do that one.

They didn't skip 3. https://en.wikipedia.org/wiki/The_Little_Mermaid:_Ariel's_Beginning

 

[dlavender]

What really is new here is the price point, right?

We can go back and forth on pros/cons, but testing out a $30 + price of subscription is what is at stake here for a streamed release.

IMO it would perform better at $20, but they have the research...