As Disney continues to prepare for the U.S. launch of its Disney Plus direct-to-consumer (DTC) streaming service Nov. 12 at $6.99 a month, the company is still working to boost the library of content it will make available initially, according to company CEO Robert Iger.
“While the initial response to our DTC efforts has been gratifying, we’re not taking anything for granted, and we continue to leverage our creative engines across our company to ensure we deliver a strong value proposition to consumers,” he said May 8 on an earnings call for Disney’s second quarter (ended March 30).
For starters, he revealed that the current theatrical film hit “Avengers: Endgame” will be available on Disney Plus Dec. 11, about a month after the service’s launch.
The company previously disclosed at its April 11 Investor Day that, in addition to its library of theatrical and TV content, in its first year Disney Plus will release more than 25 original series and 10 original movies, documentaries and specials.
Meanwhile, Disney said all 30 seasons of Fox’s animated TV show “The Simpsons” will be available on day one of the service. In the first year, subscribers will also be able to watch Fox movies including “The Sound of Music” and “The Princess Bride” as well as its TV shows including “Malcolm in the Middle.” That content will join more than 7,500 TV episodes and 500 films, Disney said.
Disney’s Q2 results were impacted by its acquisition of 21st Century Fox in late March as well as “our ongoing investment in our direct-to-consumer business,” Iger said May 8.
“The further we get into the integration process, the more impressed we are with the value of the assets, the quality of the talent and the opportunities we’re able to create,” he told analysts. For example, he said: “We’re already working with National Geographic to explore the brand’s potential across the company,” including from creating content for the DTC business.
“We’re expanding into the DTC arena with tremendous excitement and optimism, confident that the indelible connection we’ve built with billions of people over a century of great storytelling gives us an advantage in the marketplace and provides a strong foundation for success,” he told analysts.
Disney was “extremely pleased with the reaction to our Investor Day presentation, which offered an in-depth look at our DTC plans, including additional information regarding ESPN+ and Hulu as well as a detailed look at the content interface and pricing for Disney Plus,” he said.
Recently, Disney “did some deals … to get some of the content back that had been licensed to third parties” and weren’t previously expected to be available for at least a while on Disney Plus, Iger disclosed to analysts during the earnings call Q&A. “We continue to explore ways that we might be able to get more back,” he said, adding: “What we announced at Investor Day included some of the rights that we’ve managed to buy back or negotiate back from what had been licensed to third parties. And there’s still some out there that we’re exploring.”
Disney reported Q2 revenue grew 3% from a year ago to $14.9 billion. Media Networks revenue was flat at $5.5 billion, but Studio Entertainment revenue fell 15% to $2.1 billion from $2.5 billion. Profit from continuing operations soared 85% to $5.4 billion ($3.53 a share) from $2.9 billion ($1.95 a share).
Because the purchase of 21st Century Fox closed March 20, Disney only owned it for 11 days during Q2, CFO Christine McCarthy pointed out. The Fox results were reported as a separate segment.
At Studio Entertainment, lower global theatrical and home entertainment results were only “partially offset by higher” TV subscription video on demand (SVOD) distribution results, she said. As Disney noted in the prior quarter, it expected the studio’s Q2 results to face a tough comparison because Q2 last year was the best second quarter in its history, she noted, adding: “We were pleased with our worldwide theatrical results in the quarter, especially the strong performance” of the Marvel film “Captain Marvel.”
But the difficult year-over-year comparison reflected the strong performance of “Black Panther” and the “carryover performance” of “Star Wars: The Last Jedi” and “Coco” last year, she said.