Disney – Where’s the Magic?

Disney – Where’s the Magic?

Disney, once the vanguard of the entertainment industry, now faces the challenge of overseeing its various business divisions. From linear networks to streaming, theme parks to cruises, and sports to merchandise; Disney is trying to sustain its established cash cows while simultaneously investing in and nurturing the growth of its other ventures. But in doing so, it has been burning through cash, fighting boardroom proxy battles, and losing clout with consumers.

For Q2 2024, revenue for Disney increased by 1.3% to reach $22.1 billion. And operating income increased by 15% to reach $3.8 billion. Direct-to-consumer, which includes streaming services such as Disney+ and Hulu, posted its first ever quarterly operating profit, which was $47mn. This was driven by cost-cutting that Disney has implemented in their operations and content spend. Hulu programmes such as “The Bear” and “Shogun” drove the new signups to Disney’s streaming services. Disney’s experiences segment, the cash cow, generated $8.4bn in revenue, with an operating profit of $2.3bn for the quarter. Disney noted that they expect sales for their experiences segment to drop during the year, as the pent-up demand for experiences, built up during the Covid Pandemic, subsides.

Under Bob Chapek’s (Disney’s previous CEO) tenure, Disney has poured substantial resources into productions across its various studios: Marvel, Pixar, Star Wars, and Fox. However, many of these endeavours have failed to replicate the box office triumphs of previous years, particularly during Marvel’s illustrious heyday. These productions were intended to serve as the cornerstone for Disney’s streaming services to flourish, but the over expansion lead to disappointing figures.

During the earnings call, Disney acknowledged that Netflix has established the gold standard for streaming. Netflix consistently leads the industry, often pioneering new features, such as the recent crackdown on password sharing, a move that has proven effective in recouping lost revenue. Netflix have been what other streaming services are trying to replicate. However, If you were to ask about Netflix’s primary competitor, Netflix would likely point to YouTube. Netflix has previously hinted at this perspective. YouTube’s exceptional consumer engagement aligns with Netflix’s preferred focus of measuring the duration of viewers’ attention on screen.

Key Indicators
Index / Fund / Rate
Start of Year
Last Week
This Week
% Change YTD
Index / Fund / Rate
Start of Year
188.33
Last Week
196.55
This Week
201.89
% Change YTD
7.20% Lunar Capital increasesymbol
Index / Fund / Rate
JSE ALSI
Start of Year
76 893
Last Week
76 428
This Week
78 464 Lunar Capital increasesymbol
% Change YTD
2.04% Lunar Capital increasesymbol
Index / Fund / Rate
NASDAQ Composite
Start of Year
15 011
Last Week
16 156
This Week
16 341 Lunar Capital increasesymbol
% Change YTD
8.86% Lunar Capital increasesymbol
Index / Fund / Rate
S&P 500
Start of Year
4 770
Last Week
5 128
This Week
5 223 Lunar Capital increasesymbol
% Change YTD
9.49% Lunar Capital increasesymbol
Index / Fund / Rate
Prime Lending Rate
Start of Year
11.75%
Last Week
11.75%
This Week
11.75%
% Change YTD
0.00%
Index / Fund / Rate
USD/ZAR
Start of Year
18.30
Last Week
18.50
This Week
18.46 Lunar Capital increasesymbol
% Change YTD
0.87% Lunar Capital increasesymbol
Index / Fund / Rate
EUR/ZAR
Start of Year
20.17
Last Week
19.93
This Week
19.91 Lunar Capital stocktake arrow down
% Change YTD
-1.29% Lunar Capital stocktake arrow down
Index / Fund / Rate
Brent Crude ($'barrel)
Start of Year
76.97
Last Week
82.81
This Week
82.75 Lunar Capital stocktake arrow down
% Change YTD
7.51% Lunar Capital increasesymbol
Source: Iress

Click here to access your account to view statements, obtain tax certificates, add or make changes to your investments.

Our email address is: [email protected]

Disclosures
Lunar Capital (Pty) Ltd is a registered Financial Services Provider. FSP (46567)
Read our full Disclosure statement: https://lunarcapital.co.za/disclosures/
Our Privacy Notice: https://lunarcapital.co.za/privacy-policy/
The Lunar BCI Worldwide Flexible Fund Fact Sheet  can be read here.
This stocktake is prepared for the clients of Lunar Capital (Pty) Ltd. This stocktake does not constitute financial advice and is generated for information purposes only.

Share article

Latest Posts

Disney – Where is the Magic?
Disney – Where’s the Magic?
How did Disney lose its sparkle, and what are they doing to get it back.
Amazon – Not your everyday Bookseller
Amazon – Not your everyday Bookseller
What characteristics have made Amazon the everything store
Microsoft: On Cloud Nine
Microsoft: On Cloud Nine
ind out how AI has been benefitting Microsoft

Lunar Capital
on Eastwave Radio

Every Wednesday, at 07h45, Sabir chats with Nazia from Eastwave Radio (92.2 fm, live stream on
www.eastwave.co.za) on investing and the markets.

eastwave-radio
Scroll to Top