Disney’s streaming gains do not save it from COVID-19 woes, says GlobalData

Following the announcement of Disney’s earnings;

Danyaal Rashid, Thematic Analyst at GlobalData, a leading data and analytics company, offers his view on the impact of COVID-19 on Disney:

“Disney’s streaming business is performing at an all-time high but the company is being held back by its physical assets as a consequence of COVID-19. GlobalData has, therefore, re-positioned Disney’s place in its Music, Film and TV Thematic Rankings from seventh to tenth, sitting the company below all of its major streaming competitors from both the west and Asia, including Netflix, Amazon, iQiyi and Tencent.

“Disney’s streaming empire is beginning to compete with the likes of Netflix. With over 50 million subscribers gained since launch in November, the company is challenging Amazon Prime Video for a second spot in western streaming markets behind market-leader Netflix. The combined subscriber numbers from Disney’s three streaming ventures, Disney+, Hulu and ESPN+, now stands at over 90 million, up from 63.5 million at the end of Q1*.

“While the COVID-19 shutdown has driven a surge in its streaming business, the pandemic has also caused overall revenues and profits to fall this quarter because of the worldwide shutdown of Disney’s parks. Last quarter, 58% of Disney’s operating income came from its parks business. Parks revenue for Q2 was just $5.5bn, down from $7.4bn last quarter. Total operating income fell from $4bn in Q1 to just $2.4bn in Q2, largely due to a 73% fall in park-related operating income.

“There is not a lot that Disney can do at the moment but keep up its strong presence in the streaming market and wait for the effects of COVID-19 to lessen so that it can re-open its parks. The company needs to weather the storm as best it can until a time when it can re-gain its physical assets – only this time with a boosted streaming empire.”

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