DIS Shareholders and Stock Info ONLY

[clarker99]

Yep, this is a very different animal.

Not sure if they report it (I can try and look later) but do you have DIS' profit margin for the last few years for the linear side of the business only? That's basically what streaming is supposed to replace so if it is much higher than 13%, and I suspect it is, it's going to be a high hurdle to replace it all.

Quickly looking at the 2022 Annual report, Linear Network ran at around 30% margin.

 

[irlandaise]

Just what I gathered by fiscal year for just linear networks from each annual report of the last 5 years. Someone can feel free to back check it and correct:

2018 - 27% ($24.5B rev, $6.625B OI)
2019 - 30% ($24.8B rev, $7.479B OI)
2020 - 31% ($28.4B rev, $9.022B OI)
2021 - 29.9% ($28.09B rev, $8.407B OI)
2022 - 30% ($28.3B rev, $8.5B OI)

"Linear networks" means ABC and The Disney Channel, right? Does that term also include ESPN? I'm very surprised that revenues and profits have held so steady for the past several years.

 

[RivShore]

Quickly looking at the 2022 Annual report, Linear Network ran at around 30% margin.

Thanks! I was assuming around double Netflix and I was actually on the low end and it was probably higher in prior years given cord cutting.

ETA, i missed @HokieRaven5 5 year breakout, so it's been a study 30%. It "was" such a nice business!

 

[HokieRaven5]

"Linear networks" means ABC and The Disney Channel, right? Does that term also include ESPN? I'm very surprised that revenues and profits have held so steady for the past several years.

Linear Networks includes ESPN, the FX Channels they own, Nat Geo, basically any channel that’s broadcast that they have ownership of.

 

[BrianL]

"Linear networks" means ABC and The Disney Channel, right? Does that term also include ESPN? I'm very surprised that revenues and profits have held so steady for the past several years.

Liner would be any broadcast/cable netrowks that air shows at certain times. That would include ESPN. For Disney that also includes:

ABC
ESPN (and related)
The Disney Channel
Disney Junior
DisneyXD
Freeform
FX (FXX, FX Movies)
NatGeo (and related)

Many of those they got in the Fox buy. They also ahve a joint venture on A&E Networks which includes Lfietime and History, plus a venture with National Geographic for their channels.

 

[RivShore]

Many of those they got in the Fox buy.

Great point! So does the 5 year breakout include the Fox networks in all years? Maybe those additions have helped keep it study?

 

[clarker99]

Just what I gathered by fiscal year for just linear networks from each annual report of the last 5 years. Someone can feel free to back check it and correct:

2018 - 27% ($24.5B rev, $6.625B OI)
2019 - 30% ($24.8B rev, $7.479B OI)
2020 - 31% ($28.4B rev, $9.022B OI)
2021 - 29.9% ($28.09B rev, $8.407B OI)
2022 - 30% ($28.3B rev, $8.5B OI)

Yes, this is what I found as well. So, they look to have had a model where they liked 30% return.

2022 saw Direct to Consumer (DTC) lose $4B vs. $19B in revenue. That is an eye watering number. Lol.

We already know they have since increased DIS+ prices and had very low churn. We know they have cut at least $5.5billion in costs plus reducing new content spend. The advertising subscription tiers will kick in along with the All-In-One app is coming and its supposed to have excellent margins and potential (as per Iger on last earnings call).

Once you hash it out you can see where they can make up the difference and things look better. Just a matter of time. If somehow the linear side declines slow down then things look even better.

 

[HokieRaven5]

Great point! So does the 5 year breakout include the Fox networks in all years? Maybe those additions have helped keep it study?

FX has been a part of the annual reporting since FY2019.

 

[wabbott]

I hope y'all are correct in this optimism, but investors so far aren't buying it. Maybe I have too much Eeyore personality in me.

 

[PolymerSkywalker]

Investors certainly seem to be spooked about something in DIS right now.

 

[HokieRaven5]

Yes, this is what I found as well. So, they look to have had a model where they liked 30% return.

2022 saw Direct to Consumer (DTC) lose $4B vs. $19B in revenue. That is an eye watering number. Lol.

We already know they have since increased DIS+ prices and had very low churn. We know they have cut at least $5.5billion in costs plus reducing new content spend. The advertising subscription tiers will kick in along with the All-In-One app is coming and its supposed to have excellent margins and potential (as per Iger on last earnings call).

Once you hash it out you can see where they can make up the difference and things look better. Just a matter of time. If somehow the linear side declines slow down then things look even better.

Yeah we’ll see if the drop in linear stabilizes at some point.

Just looking domestically at the Disney Centric Channels it’s been a 14-18% decline in the subscribers since 2018.

 

[wabbott]

I have to believe that streamers all along had plans to introduce advertising for the product. But had they done that up front, subscribers wouldn't have embraced the product.

Bait and switch.

 

[clarker99]

I hope y'all are correct in this optimism, but investors so far aren't buying it. Maybe I have too much Eeyore personality in me.
View attachment 769536

If all DTC does is replace Linear networks operating income, then the stock is worth closer to $150 than $90. It will not be a rocket ship to the moon in terms of price but the current price is far to low. Also, throw in the dividend and who knows.

 

[irlandaise]

Yeah we’ll see if the drop in linear stabilizes at some point.

But I'm not seeing a drop, in either revenues or profit, according to the numbers you posted for 2018-2022. Revenues are $4B higher now, and although profit for 2022 wasn't as high as in 2020, it was above 2021 and much higher than 2018 or 2019.

 

[HokieRaven5]

But I'm not seeing a drop, in either revenues or profit, according to the numbers you posted for 2018-2022. Revenues are $4B higher now, and although profit for 2022 wasn't as high as in 2020, it was above 2021 and much higher than 2018 or 2019.

I should clarify I meant the drop in linear subscribers stabilizes. The profit by all accounts have been stable over the last 5 years on the linear network side of things.

 

[wabbott]

8/7/23 is the next earnings date. We shall see.

 

[RivShore]

I have to believe that streamers all along had plans to introduce advertising for the product. But had they done that up front, subscribers wouldn't have embraced the product.

Bait and switch.

To be fair to Disney at least, Hulu always (I think since it's very beginning) had an ad tier and a higher cost ad-free tier. Not at all surprising that the their other streaming products would go the same route. Now I am surprised at Netflix and HBO adding ads, they both really built their whole business on ad-free.

 

[wabbott]

To be fair to Disney at least, Hulu always (I think since it's very beginning) had an ad tier and a higher cost ad-free tier. Not at all surprising that the their other streaming products would go the same route. Now I am surprised at Netflix and HBO adding ads, they both really built their whole business on ad-free.

Yes, but back when there was a lot less competition. And HBO has long been kept afloat by cable, which is shifting rapidly. My cable bill has almost doubled in less than two years, and I'm just about to cut the cord.

 

[clarker99]

8/7/23 is the next earnings date. We shall see.

I am not really expecting the stock to have a proper pulse until sometime in 2024.

 

[BrianL]

To be fair to Disney at least, Hulu always (I think since it's very beginning) had an ad tier and a higher cost ad-free tier. Not at all surprising that the their other streaming products would go the same route. Now I am surprised at Netflix and HBO adding ads, they both really built their whole business on ad-free.

The thing is, consumers don't want commercials, but advertisers do. Consumers are unwilling to pay what it would cost to get those high-budget shows that they love without ads, so it falls to the advertisers who will pay it. As their liner options shrink, they want a way to put their products in front of consumers and they are going to get it.