At Disney, Streaming Soars as Other Businesses Continue to Struggle

Daniel Fowler
November 15, 2020

Studio Entertainment segment reported fourth-quarter revenues of $1.59 billion, down 52% year-over-year.

In the company's year-end earnings call, Disney was blunt and honest that there is no expectation within the company that Disneyland Resort would see the theme parks reopening before the end of the company's next financial quarter, which ends on December 31 2020. With movie theaters closed and TV production stalled, Disney's streaming efforts have become the focus-and promise-of a company otherwise marked by layoffs and unprecedented losses.

And Disney Cruise Line is another part of the company slammed by the pandemic.

Disney says the estimated Q4 impact to its parks segment from the COVID-19 pandemic was around $2.4 billion.

Additionally, the company's total revenue also suffered a significant drop, with Disney reporting only $14.71 Billion in 2020, compared to its $19.1 Billion total in the same period past year, for a grand total in $5 Billion in revenue loss.

"The real bright spot has been our direct-to-consumer business, which is key to the future of our company", Chief Executive Officer Bob Chapek said in a statement. Disney, which reported a $6.9 billion hit due to closures and other parks operating at "greatly reduced capacity", expects Disneyland to remain closed through the end of 2020.

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Its Diluted Earnings Per Share (EPS) from continuing operations for the fourth quarter was at a loss of $0.39 million compared to the income of $0.43 in the prior-year quarter.

Walt Disney Co. jumped in late trading after adding more online subscribers than predicted last quarter, bolstering results and chipping away at Netflix Inc.'s dominance in the streaming industry.

Gov. Gavin Newson sent a team to Disney World and Universal Orlando in mid-October to investigate how the theme parks were operating during the pandemic.

Chapek also mentioned that other Disneyland parks have already successfully opened in Ohio, Shanghai, Tokyo, and Hong Kong based on safety protocols. Disneyland Paris reopened in July and is now closed again.

The company laid off about 28,000 employees in September, but they did not reveal at the time how the job losses would be split up among the Disney Parks, Experiences and Products business affiliates.

Chapek said the company has proven they're able to operate parks responsibly following strictly enforced guidelines provided by healthcare experts which he says has only boosted fans' love of the brand. Chapek said he was "extremely disappointed" California's government hadn't loosened restrictions for Disneyland.

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