Disney -- Iger -- Streaming -- Update -- The Other Shoe Is Yet To Fall -- April 30, 2023

Locator: 44505D.

Streaming: link here. Streaming wars.

Disney, Iger working the issue.

Bullets:

• 7,000 layoffs by summer
• across all segments: Disney Entertainment, ESPN, Disney Parks, Experiences and Products
• but also reports point to a sizable number of cuts at Disney+
• top three executives were let go over the weekend
• these and other actions represent a larger shift for the streaming division's future

Iger, who stepped back into the CEO position in November, has remained hyper-focused on profitability even as investors shift focus away from subscriber growth and put more emphasis on margins. [Didn't we say that just a few days ago with respect to EVs?]

The company's direct-to-consumer division, which includes Disney+, Hulu and ESPN+, shed a whopping $4 billion-plus in its fiscal 2022 ended October 1, after it spent an estimated $33 billion on content last year.

Since that time, Iger has worked hard to establish new revenue streams like Disney's recently launched ad-supported tier, in addition to various price increases to help pare losses.

In its latest quarter, streaming losses narrowed to $1.1 billion in Q1 from $1.5 billion in Q4 — ahead of the company's previous guidance.

Still, losses were up compared to the year-ago period when direct-to-consumer losses totaled $593 million.

Iger reaffirmed the company's outlook of reaching streaming profitability by the year 2024.

Fascinating story. A billion here and a billion there isn't going to "cut it." We're going to need to see a huge change. The other show is yet to fall.