box office

This year, Disney is having a record run at the box office as it surpassed $8 billion in global ticket sales. We can surely say that this success is because of an astounding run of blockbuster releases across its Marvel and core Disney brands. The company is now trying to expand that success well beyond the theater, and obviously for that they have to spend big.

The company posted revenue of $20.25 billion in its fiscal third quarter earning results for 2019, coming in under Wall Street estimates of $21 billion. In the company’s earnings report release this afternoon CEO Bob Iger said:

“I’d like to congratulate The Walt Disney Studios for reaching $8 billion at the global box office so far this year, a new industry record thanks to the stellar performance of our Marvel, Pixar and Disney films,“The incredible popularity of Disney’s brands and franchises positions us well as we launch Disney+, and the addition of original and library content from Fox will only further strengthen our direct-to-consumer offerings.”

According to the report, the company’s missed targets are related to higher operating costs associated with the acquisition of 21st Century Fox, full ownership of Hulu, and the investment in its upcoming streaming service Disney+ also contributed. Despite these circumstances, on a call Iger told all the investors following the accession, that:

we remain confident in our ability to maximize our strategy.

Including Disney’s media networks like cable and broadcast television, and, of course, studio entertainment, most of Disney’s divisions saw an increase in sales. The studio entertainment, which is most recent quarter, alone saw increase 33 percent increase in revenue to $3.8 billion.

In 2019, Disney’s momentum at the box office has been unmatched. The company’s first big release of 2019 was Captain Marvel, and upon its release it flew to more than $1 billion worldwide.  After that, the two more movies by Disney crossed the $1 billion threshold. Avengers: Endgame, with the $2.8 billion dollars, is the top-grossing movie of all time now. Since its late May release, Aladdin, grossed more than $1 billion.

However, it is crystal clear that Disney owns the theatrical year,especially with the acquisition of 21st Century Fox. However, this year is not something we can say the entertainment blockbuster will be capable of duplicating come 2020. According to analysts who told CNBC that, there will be a bit pause for Disney in next year. Disney will not be able to post 2019 numbers again, without a major holiday movie and a much smaller slate of obvious blockbusters. However, in 2021, when Avatar 2 is scheduled to come out, Disney may make a comeback again.

Moreover, the focus of the company is on Disney+, which launches on November 12th. They are not focusing on necessarily beating its current theatrical milestone, next year. In recent years, Disney+ is one of the company’s biggest undertakings. Also, with billions of dollars spent by the company on acquiring majority stakes in streaming providers like BAMTech. It provides the technical backbone, in order to ensure the product is up to snuff, for HBO Now and the WWE Network.

read also: Google researchers discovered several iPhone security flaws

We can say that Disney is now entering an extremely overcrowded market. There are new entries coming from Apple, NBC Universal, WarnerMedia (HBO Max), and Amazon Prime Video, but still Netflix is the leading company in direct-to-consumer streaming. Disney wants to compete by offering its exclusive library of films and TV shows. It is also to be mentioned that Disney has now full control over Hulu. Disney has also set price of its offerings quite cheap to attract customers, at $6.99 a month or $69.99 a year.

Moreover, there is also another later plan of the company to bundle ESPN+ and Hulu with Disney+, however there are only few details shared about this bundle. According to the Iger , by the end of 2020 Disney+ can attract 12 million subscribers, which is approximately 20 percent of Netflix’s current US subscriber base.

 

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