Walt Disney Company Q3 Earnings Report

[Mit88]

If Disney did that with Mandalorian they would make a lot of people angry. Disney+ and DTC is holding this company together right now.

They’d simply just raise the subscription price, not make shows a la cart. I cant imagine Disney keeping the $7 price tag once the MCU shows and other Star Wars programming gets up and running.

 

[DGsAtBLT]

There are some really upset people on social media with the comments about passholders. I guess it was not as obvious as many of us thought that per guest spending in general is going to be lower for a local guest.

 

[DGsAtBLT]

I kind of think to the frustration of the consumer, streaming services may all wind up moving in this direction until we get annoyed with them and move to the next thing like the jump from cable to streaming.

 

[Mit88]

It’s 1 movie (so far). It’s not the downfall of all that is Disney. It’ll still release in theaters where it can. People will buy it on Disney+. They’ll make more money than they will by continuing to push back the release. What if theaters aren’t ready to open and be completely filled by people until late 2021 or 2022? Should Disney continue to hold back Mulan (and all the other releases they have between now and then) and create a backlog that they can’t get out of? This will get them some revenue now, even if they have to take a loss on this specific film, it’s better overall for the company.

It’s the possibility that this is the start of a trend that is worrisome. And not just to me, but should be for all Disney fans. It might be just 1 movie, but its still a big loss for them regardless. It’s like breaking even on the parks. Cool, people are going and they’re staying afloat, but thats not good, and if it continues, it’ll get worse, not better.

Christopher Nolan would have to pass away for WB to put Tenent on streaming. He’s pro-pro-pro the theater going experience.

But WW84, Dune, Soul, Black Widow, Bond. All potential billion dollar films that if released on PVOD are break-even movies.

 

[Mit88]

There are some really upset people on social media with the comments about passholders. I guess it was not as obvious as many of us thought that per guest spending in general is going to be lower for a local guest.

I forget who said it the other day but they brought up an interesting point. AP’s might not spend as much as vacationers on a day to day basis, but theyre also in the parks 20+ times a year, and even if they spend 25% of what a vacationer will spend on a day at the parks, it adds up because they’re in the parks more over the course of the year. Maybe that works more for DL than WDW because they have more of an AP base. But I dont think APs go in the parks and leave without spending a dime. That might be the plan, but then something catches their eye and now they just spent 20-30 dollars.

It was APs that bought out the Splash merch that has been sitting in that store since 1992. Yes, they all sold it for mega-profit, but Disney still got rid of the merch that they couldnt pay people to take prior to the announced retheme.

Then again, if they’re admitting that APs dont spend money in the parks like vacationers do (which is obvious) I still think its kind of a slap in the face. How often are locals shown that they dont matter to Disney? It’s a strange strategy, but they continue to do it, and locals continue to re-up their passes

 

[JacknSally]

We don't go to the movies much but I always picked our small local place called Flix. They got stadium seating 5 or 6 years ago. They were a lot more reasonably priced and way way less crowded than the big theater chains and locally owned. They hung on even as AMC and Regal moved in to devour a lot of other places over the years. Unfortunately I doubt they will survive this. A real shame.

Our only movie theatres are MALCO, a locally-owned-and-operated regional chain. No AMC or any big national chains anywhere reasonably near us. It’ll be interesting to see what happens with them. Most of their big theatres locally are up-to-date, but they’ve spent a lot lately remodeling most of their smaller outdated theatres, and as of now they’re still moving forward with a theatre & bowling center they’ve had planned for a while, two miles from two existing theatres.

 

[Krandor]

It will kill the low end theaters that haven’t upgraded in the past 20 years. This would likely thin the herd to only theaters which can provide a better experience (i.e. Alamo Drafthouse). With the consolidation of theater chains in the US, there hasn’t been much incentive for theaters to improve their product.

If VoD is available day and date with theater I don't think any theaters survive. Endgame sold out for opening night. No problem. Order VoD. Both available the same day is not a workable model. Theaters are they are are razor thin margins. Cut that down and the vast majority don't survive.

 

[Krandor]

Then again, if they’re admitting that APs dont spend money in the parks like vacationers do (which is obvious) I still think its kind of a slap in the face. How often are locals shown that they dont matter to Disney? It’s a strange strategy, but they continue to do it, and locals continue to re-up their passes

It's not a slap in the face. An earnings call isn't the place to try to be nice to people. It is a place to lay out the facts. And the facts are what they are. It wasn't stated to be mean to passholders or indicate they don't matter but was stated to explain what current revenue looked like and why which is the purpose of the call. Investors want to know that kind of data especially in a situation like we are in right now.

 

[Mit88]

The nearest AMC and Regal are 30 minutes from me. The nearest AMC with an IMAX and/or Dolby digital screen is about an hour. We have a small theater chain nearby that we see non-blockbuster movies at. That theater announced a month ago that they will not be able to reopen when theaters are allowed to come back.

For movies like anything MCU/Star Wars related, I’m driving an hour each way to the IMAX without thinking twice. Opening night of Endgame last year we drove to the IMAX, and saw it twice that night (I saw it in theaters 12 times total) and didnt get home until 4am. There are still a lot of people that aren’t ready for the theater going experience to go away, and that shows with last years box office totals.

 

[JacknSally]

I forget who said it the other day but they brought up an interesting point. AP’s might not spend as much as vacationers on a day to day basis, but theyre also in the parks 20+ times a year, and even if they spend 25% of what a vacationer will spend on a day at the parks, it adds up because they’re in the parks more over the course of the year. Maybe that works more for DL than WDW because they have more of an AP base. But I dont think APs go in the parks and leave without spending a dime. That might be the plan, but then something catches their eye and now they just spent 20-30 dollars.

It was APs that bought out the Splash merch that has been sitting in that store since 1992. Yes, they all sold it for mega-profit, but Disney still got rid of the merch that they couldnt pay people to take prior to the announced retheme.

Then again, if they’re admitting that APs dont spend money in the parks like vacationers do (which is obvious) I still think its kind of a slap in the face. How often are locals shown that they dont matter to Disney? It’s a strange strategy, but they continue to do it, and locals continue to re-up their passes

Someone in one of Carlye’s twitter threads today said that when they worked at the company, non-local-APs made up ~80% of WDW’s clientele. On the call today, they said current attendance is roughly 50% local and 50% out of market, which is a huge reduction in their typical “go big or go home” spending base.

I, too, was surprised by the “uproar” on social media from people who I guess just learned that Disney values the out-of-market dollars more than the local-AP dollars? I know a lot of APs see their ticket as a status symbol of sorts within the parks, so maybe it’s a hurt pride reaction. I just thought more people were already aware that WDW has really geared their focus to those out-of-market higher spend guests, be they once-in-a-lifetime or every-few-years or whatever.

 

[Mit88]

If VoD is available day and date with theater I don't think any theaters survive. Endgame sold out for opening night. No problem. Order VoD. Both available the same day is not a workable model. Theaters are they are are razor thin margins. Cut that down and the vast majority don't survive.

Even the 17 day window that Universal made the deal with AMC would kill exhibitors. I dont think it’ll wind up being allowed unless Regal/Cinemark/Alamo all strike the same deal because AMC and Universal are the only ones benefitting from that deal, and exhibitors just simply wouldn’t play the movies in their theaters, and thats not what Universal wants for less screens to be made available on their big budget movies.

 

[OSUZorba]

An admission that out-of-state/non-local AP guests are more valuable to Disney than local APs.
View attachment 515838

On a per day basis, this is true at literally every theme park in the world. The whole point of selling APs to fill in the slow times. Also APs being the parks creates lines, which gets daily ticket holders to stay in the parks longer, spending more money on food and merch. The per caps at Cedar Fair used to be lower than the cost of a daily ticket, only way that can happen is from APs getting more than their money's worth in park visits.

 

[Mit88]

Someone in one of Carlye’s twitter threads today said that when they worked at the company, non-local-APs made up ~80% of WDW’s clientele. On the call today, they said current attendance is roughly 50% local and 50% out of market, which is a huge reduction in their typical “go big or go home” spending base.

I, too, was surprised by the “uproar” on social media from people who I guess just learned that Disney values the out-of-market dollars more than the local-AP dollars? I know a lot of APs see their ticket as a status symbol of sorts within the parks, so maybe it’s a hurt pride reaction. I just thought more people were already aware that WDW has really geared their focus to those out-of-market higher spend guests, be they once-in-a-lifetime or every-few-years or whatever.

It just makes sense. Locals can go whenever they want. So why would Disney need to continue to cater to them if they’ve already got them? Reel in the big fish thats going to buy the add ons, and the special paid experiences, and the tours. I know people that have gone once, maybe twice in their lives that have spent more on their singular trips than I’ve probably spent in the last 15 years at Disney combined, and thats including buying a 400pt DVC contract.

 

[Eric Smith]

It’s the possibility that this is the start of a trend that is worrisome. And not just to me, but should be for all Disney fans. It might be just 1 movie, but its still a big loss for them regardless. It’s like breaking even on the parks. Cool, people are going and they’re staying afloat, but thats not good, and if it continues, it’ll get worse, not better.

Christopher Nolan would have to pass away for WB to put Tenent on streaming. He’s pro-pro-pro the theater going experience.

But WW84, Dune, Soul, Black Widow, Bond. All potential billion dollar films that if released on PVOD are break-even movies.

$30 is the same amount that it would cost if they released Mulan straight to blu ray. It doesn’t seem exhortinant at all to me. It seems pretty obvious that theaters in the US won’t be opening any time soon and Disney probably doesn’t want to sit on Mulan for a year or more. It was always destined to do better in the Chinese market so it’ll be interesting to see what they do with Mulan over there.

One data point isn’t a trend. Would you be this upset if they sold it for $30 on Amazon, Xbox....etc?

 

[Krandor]

Even the 17 day window that Universal made the deal with AMC would kill exhibitors. I dont think it’ll wind up being allowed unless Regal/Cinemark/Alamo all strike the same deal because AMC and Universal are the only ones benefitting from that deal, and exhibitors just simply wouldn’t play the movies in their theaters, and thats not what Universal wants for less screens to be made available on their big budget movies.

I definitely have my doubts on the 17 day window but it at least has a chance since that gives the theaters 3 weekends and most people who are going to see it in a theater go during that time. It is for sure? no but it at least has a chance. I normally do dolby cinemia movies and those only last 1-2 weeks in dolby before getting replaced and theaters make more money off the PLF theaters.

 

[MouseEarsMom33]

They’re taking a big loss with Mulan unless some miracle happens where 40,000,000 Disney+ subscribers get auto-charged for the movie and dont notice it on their bill.

Considering they accidentally charged all those APs last month...

 

[Krandor]

$30 is the same amount that it would cost if they released Mulan straight to blu ray. It doesn’t seem exhortinant at all to me. It seems pretty obvious that theaters in the US won’t be opening any time soon and Disney probably doesn’t want to sit on Mulan for a year or more. It was always destined to do better in the Chinese market so it’ll be interesting to see what they do with Mulan over there.

One data point isn’t a trend. Would you be this upset if they sold it for $30 on Amazon, Xbox....etc?

If you could buy it and keep it forever at $30 that isn't bad but there are not a lot of movies I'm going to pay to own prior to watching them. However the issue here is it isn't $30 to keep forever. It is $30 to keep as long as you pay for D+ monthly. Stop paying for D+ and you lose the money.

 

[Mit88]

If you could buy it and keep it forever at $30 that isn't bad but there are not a lot of movies I'm going to pay to own prior to watching them. However the issue here is it isn't $30 to keep forever. It is $30 to keep as long as you pay for D+ monthly. Stop paying for D+ and you lose the money.

And thats also typically $30 for the Blu-ray AFTER you spent money seeing it in theaters. Unless you’re blind buying the movie on physical media.

Well, you own it until its released on D+ as part of their library. So technically you’re losing it about 45-50 days after release anyway. It’s a $30 one month rental essentially

 

[DGsAtBLT]

Would it make you guys feel more at
home if they mailed a themed cupcake to every household who paid for the early release?

Never underestimate Disney’s ability to entice people to spend more.

 

[mattpeto]

Just my opinion, the movie theater business will be back eventually. We won’t be in a pandemic forever.

I could see the new Star Wars and Avatars resurrecting the theater industry.