2017 Q1 Walt Disney Co earnings report shows shows increase in revenues amid falling attendance

Feb 08, 2017 in "The Walt Disney Company"

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Posted: Wednesday February 8, 2017 12:00pm EST by WDWMAGIC Staff

The Walt Disney Company reported its quarterly earnings report yesterday for the quarter ending December 31 2016.

Parks and Resorts revenues increased 6% to $4.6 billion, despite attendance falling. Higher operating income came from an increase in guest spending due to higher average ticket prices, hotel room rates and increased food and beverage spending. Resort occupancy was down slightly to 91%.

Attendance in the domestic parks was down 5%, although unfavorable conditions including Hurricane Matthew were estimated to account for 4% of that drop. Disney estimated that the park closures related to Hurricane Matthew cost the company $70 million, through disrupted operations at Disney World.

Operating costs at the parks were flat, as cost inflation was offset by cost saving measures.

Disney CEO Bob Iger also put an opening timeframe of 2019 for Star Wars Land at both Disneyland Resort and Walt Disney World, along with an opening date for Pandora - The World of Avatar.

Listen to the full earnings call and report.

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ford91exploderFeb 09, 2017

Iger is delusional if he believes what he just said multiple market surveys just don't find Disney programming that compelling or highly valued as only ONE of Disneys properties makes it into the bottom quarter of the top 20 channels.

ford91exploderFeb 09, 2017

But here's the problem with Disneys DTC model. Only about 20% of Disneys current ESPN subs are willing to pay for it and to provide current level of programming for that number of subs would cost 22 bucks per sub and market surveys show ESPN viewers would pay no more than 8 bucks Disney is truly between a rock and a hard place The rest of Disney programming does not even move the needle on the demand side. No Disney network makes the top 10 must have ala carte bundle and the best showing is ESPN at #16 behind the Weather Channel

ford91exploderFeb 09, 2017

And he should have STAYED a weatherman as Iger is the embodiment of the Peter Principle by this statement

RustySporkFeb 08, 2017

Preach! Although, I still watch live TV OTA. I have a DVR though so I can still skip the blasted commercials!

LAKid53Feb 08, 2017

One benefit of cord cutting, no stupid commercials....

SorcererMCFeb 08, 2017

I think that the issue is - the trend of a decline in ad revenue, this quarter and previous quarters; part of the changing media landscape. This quarter ad revenue was -7%; attributed to ESPN/ the College Bowl games, 3 this year vs 6 games last year as well as fewer programming hours. 'Other entrants to the marketplace' do not have the same quantity of commercial interruptions....so, as Disney shifts to a direct-to-consumer model (DtC), maybe they are slowly going to shift away from ad revenue towards subscription revenue on mobile-friendly devices? Here is more of what he was saying (again, not an exact quote): Iger – decline in kids’ viewing on linear channels, bit of an off-cycle, proliferation of programming in other places. Mickey Mouse Roadster Racers, Tangled series, and product cycle, we think that the ratings are likely to improve with addition of new shows creatively strong. Chance of doing well from disruption perspective because of the name Disney – greater demand to license our product on other platforms, and possibility of taking it DtC. In UK, Disney life, movies, tv programming, digital books and music. Experimental stage, tech platform, churn rates, pricing. Brand and product behind it to be able to take it DtC. Blend of linear channels.

IanDLBZFFeb 08, 2017

Plus Passholders (which was not mentioned).

LAKid53Feb 08, 2017

Umm, so that may not bode well for locals....

LAKid53Feb 08, 2017

By commercials, does he mean ads for that little blue pill and the like? Not that I want to second guess the CEO of the largest entertainment company on the planet, but he does realize that's where broadcast TV gets its revenue from - ad time sold? And that unless that broadcast ABC channel is licensed to corporate (thinking LA and NY markets), that ABC channel I hardly ever watch except for Saturdays during the fall, is an affiliate and dependent on that ad revenue for its existence. Didn't he start out as a weatherman at a network affiliate? :confused:

SorcererMCFeb 08, 2017

From my notes; not an exact quote: Avatarland is a big land, in design and architecture, and an e-ticket attraction unlike what we have built, sizeable add-on to Animal Kingdom, added night-time safari experience and other entertainment, so turning 4th gate into a much fuller experience, biggest new land that we’ve opened in a long time, good for the whole business. We believe that interest in those movies is going to grow, we can’t quantify it, but a lot of potential.

MisterPenguinFeb 08, 2017

Anyone know what he might have meant by "whole experience is sizable"?

the.dreamfinderFeb 08, 2017

Earnings call replay is up for anyone who's interested; same link as OP.

RobbinsDadFeb 07, 2017

That is interesting.

SorcererMCFeb 07, 2017

Iger made some interesting comments about there being too many commercial interruptions in television, when entrants to the marketplace don't have as many; it's something they are 'looking at'.