Disney Profit Jumps 50%, and Streaming Subscriptions Surpass Netflix

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A year ago, because of the coronavirus pandemic, most of Disney’s theme parks were operating at reduced capacity and Disney Cruise Line was not operating at all. Since April, Disney’s domestic parks and cruise ships have been generally operating without coronavirus-related capacity restrictions, the company said. Disney parks have also started to charge for line-shortening privileges, which has opened up a colossal new revenue stream. New rides have also debuted.

Disney’s 22 domestic hotels had an occupancy rate of 90 percent in the quarter, Christine M. McCarthy, Disney’s chief financial officer, told analysts on the conference call. Bookings for the rest of the year are “roughly in line” with prepandemic levels, she added, and park attendance on “many days” has exceeded 2019 levels.

Disney’s traditional financial engine — cable television — has been under increasing strain because consumers are canceling cable hookups at an accelerated pace. In the United States, about 7.5 percent of cable customers cut the cord in the most recent quarter, up from 4 percent a year earlier, according to estimates from the research firm LightShed Partners. Cable channels have been largely gutted of the best programming beyond live sports. Top entertainment content is now funneled to streaming services.

However, a shift in the timing of this year’s National Basketball Association finals, soccer programming and the Academy Awards provided Disney’s traditional television business with an upbeat quarter. Revenue for the division, which includes ABC, ESPN, FX, the Disney Channel and National Geographic, totaled $7 billion, up 3 percent from a year earlier, and profit of $2.5 billion, a 13 percent increase.

Streaming, on the other hand, continues to lose money as Disney spends aggressively on content, marketing and technology infrastructure. Losses for Disney’s streaming division exceeded $1 billion, compared with a loss of $300 million a year earlier. Streaming revenue climbed 19 percent, to $5.1 billion.

Prices for a bundle of Disney’s three streaming services will range from $13 a month (with ads) to an unchanged $20 a month (without ads on Disney+ or Hulu but with ads on ESPN+).

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