The news: Disney had a strong Q1 (ended January 1, 2022), reporting a 34% year-over-year (YoY) increase in revenues, per a company release.
The pandemic recovery continues: Over the past 100 years, Disney has amassed an entertainment empire, spanning films, TV, merchandising, hospitality, and much more. However, its biggest moneymakers (theme parks and merchandise) are yet to fully recover from the effects of the pandemic, and films that would ordinarily be blockbusters have failed to drive audiences to the cinema.
The company’s network channels are also struggling to adapt to a decline in viewership. While Disney’s linear revenues for Q1 remained virtually unchanged from the prior year, its operating income in that segment decreased by 13% YoY, with the company blaming higher production and programming costs, as well as a drop in average viewership.
Covering its bases: One way that Disney can mitigate the effects of viewership decline is by doubling down on a proven vehicle that consistently attracts millions of viewers: sports.
Streaming intensifies: The biggest story to come from Disney’s earnings is about Disney+; namely, its ability to do what Netflix could not—grow its domestic subscriber base.
The takeaway: Disney has its finger in many pies, but it is increasingly clear that streaming is where the company’s focus lies.