Disney’s film and streaming sectors are struggling amid Hollywood’s largest strike since 1960.
Amidst the largest Hollywood strike in almost 60 years, media conglomerate Disney released its quarterly earnings, making some observers happy and disappointing others. Disney CEO Bob Iger explained his company’s outlook during an investors call.
Disney’s quarterly revenues came in at $22,33 billion, lower than the $22,5 billion expected by markets. On the other hand, revenues per share exceeded expectations at $1,03 compared to $0,95 expected.
Disney’s parks and experience sector saw a 13% revenue increase to $8,3 billion, the best-performing sector for the mouse company.
Disney’s stock saw a 3,33% price hike on Wednesday morning as markets opened.
On the other hand, Disney’s proprietary streaming platform continues to fall flat on expectations. Disney+ saw a 7,4% decline in subscribers to 146,1 million overall.
Bob Iger stated Disney will raise prices for non-ad-based subscription tiers. Disney, similar to its main streaming rival Netflix, created a low-price subscription tier that involves ads.
Also similarly to Netflix, Disney is considering cracking down on password sharing. Netflix revenues exceeded expectations the quarter after this crackdown was implemented (though revenues per subscriber declined).
Bob Iger also acknowledged the disappointing performance of Disney tentpoles (the industry’s term for "blockbuster") at the box office. Elemental barely broke even with a $423 million worldwide box office, while the latest Indiana Jones chapter bombed with just $369 million globally.
“The performance of some of our recent films has definitely been disappointing, and we don’t take that lightly,” Iger said. “As you’d expect we’re focused on improving the quality of the films we’ve got coming up. It’s something I’m working closely with the studio on.”
Hollywood strikes
Wednesday marks the 100th day since Hollywood’s Writers Guild Association (WGA) began its mass strike. On July 14th, two months after the beginning of the strike, the Screen Actors Guild (SAG) also joined the picket line.
Writers and actors demand better pay in lieu of increasing costs of living (especially in the Los Angeles urban area) and seeing executives’ multi-million contracts with production majors.
They also demand a share of streaming revenues and protection against artificial intelligence, whose development could threaten Hollywood’s creative efforts. Reuters reported that Disney created a task force for AI research and development, with salaries up to $900,000 annually.
Despite this large investment, Bob Iger claimed that writers’ and actors’ demands for better pay were “unrealistic”.
Hollywood has a long history of creatives’ going on strike. Most recently, the WGA joined the picket lines in 2007 demanding better recognition and a share of DVD sales.
After a 100-day strike, writers were granted 1.2% of the distributor’s gross receipts for rentals and 0.65%-0.7% of gross receipts.
If the strike continues into the next film season, executives might be forced to find a similar deal with creatives.
