"Walt Disney: Mixed Effects of Untact Opportunities and Contact Challenges"

[Asia Economy Reporter Eunmo Koo] The Walt Disney Company is experiencing a mixed impact from the COVID-19 pandemic, with benefits from untact (contactless) trends and drawbacks from contact-based activities. Ultimately, the speed of recovery from COVID-19 is considered crucial.

According to Hana Financial Investment on the 10th, Disney's online video service (OTT) 'Disney+' reached 54.5 million paid subscribers in early May due to the stay-at-home benefit and global expansion, but all its businesses including parks, movies, and media suffered damage from COVID-19.

Disney operates businesses based on content intellectual property (IP) including ▲Media (cable and broadcasting) ▲Parks (theme parks, resorts, licensing) ▲Movies (production and distribution) ▲DTC&I (streaming and overseas content distribution).

Researcher Kihoon Lee of Hana Financial Investment stated in a report on the same day, "If production delays in the media sector prolong, OTT may also face risks in content supply. The parks sector is expected to reopen starting from Shanghai, which has entered a stabilization phase, on the 11th, but will only accommodate less than 30% of its usual capacity. Similar trends are expected in the U.S. in the future." He added, "The movie sector is not expected to release any films until July, so there will be no significant fundamental changes in the near term."

For the second quarter of fiscal year 2020, revenue was $18.1 billion, up 21% year-on-year, while operating profit was $1.4 billion, down 60%. Adjusted earnings per share (EPS) were $0.60, below the consensus of $0.86. Adjusted operating profits by segment were $2.4 billion for media, $600 million for parks, $500 million for movies, and -$800 million for DTC&I.

The media segment grew 7% due to the Fox merger and accounting standard changes, despite decreased advertising revenue from cancellations of major sports events including the Olympics. The parks segment shrank 58% due to the closure of global Disneyland locations. The movie segment declined 8% despite the impact of delayed releases like 'Mulan', thanks to expanded Disney+ content supply. DTC&I's losses doubled year-on-year due to content investments and global launch costs for Disney+.

Except for DTC&I, all Disney business units were hit by COVID-19. Particularly, the parks segment saw closures of all Disneyland parks including Shanghai and Hong Kong at the end of January, Tokyo at the end of February, and the U.S. and Paris in mid-March, leading to the layoff of tens of thousands of U.S. theme park employees last month. The movie segment postponed releases of 'Mulan' and 'Black Widow' to the second half of the year as U.S. theaters closed from mid-March, and shortened exclusive theatrical runs for recent titles like 'Frozen 2'. The media segment also suffered from reduced advertising due to cancellations or postponements of sports events and has halted TV program production since mid-March following government recommendations.

This content was produced with the assistance of AI translation services.