On May 10, The Walt Disney Company hosted its second-quarter earnings call for the 2023 fiscal year. During the call, Disney CEO Bob Iger and Chief Financial Officer Christine McCarthy shared where the company had succeeded and where it fell short. Disney’s global theme parks performed exceptionally well. Disneyland Paris has been seeing a record number of visitors, and Shanghai and Hong Kong are performing well, even though they have still been struggling with COVID. Iger admitted that the profits made in the Parks were largely to do with the “aggressive” pricing at the Parks, as well as what Guests at Disneyland and Walt Disney World Resort spend on Disney Genie+.
The biggest hit that Disney took came in the form of Disney+. Disney+ only launched in 2019, so it is still considered a relatively new platform. In those three years, Disney has amassed over 150 million subscribers. Since its launch, the only Disney+ option was an ad-free tier, which was $7.99 per month. Then, in December 2021, Disney introduced the ad-supported tier, which costs $7.99 per month. The ad-free tier then shot up to $10.99 per month. Since then, Disney+ has steadily been losing subscribers.
In the hours and days following the call, Disney’s stock has been on a steady decline. It has been less than 48 hours, and Disney’s stock is down nearly 10%. On May 10, just before the earnings call, Disney shares sat at $103.10 per share. As of Friday afternoon, shares have dropped to just under $92. While most of Disney’s earnings beat or met Wall Street’s expectations, analysts still felt inclined to lower the company’s value a bit.
Disney’s stock saw the steepest decline of all the stocks in the Dow Jones Industrial Average. However, analysts are still calling Disney a “Buy” stock. Analysts predict that Disney is setting itself up for long-term success, but the steep drop in Disney+ subscribers is a big concern. For the second quarter in a row, Disney+ lost subscribers, this time losing a whopping 4 million.
Profits and losses were not the only things discussed during the earnings call. During the Q&A session, Iger was asked about the ongoing battle between Disney and Florida Governor Ron DeSantis. Disney is currently suing the governor for retaliating against them for speaking out against the state’s Parental Rights in Education Bill. Iger doubled down on Disney’s lawsuit, claiming that the governor is targeting them, punishing them because the company exercised its First Amendment right.