Walt Disney, Long-Term Growth Still Valid Despite Short-Term COVID Impact
Entered global online video service (OTT) competition last year with the launch of Disney+
[Asia Economy Reporter Geum Bo-ryeong] Although Walt Disney was affected by the novel coronavirus infection (COVID-19), an analysis shows that its long-term growth potential remains valid.
According to Shin Young Securities on the 31st, Walt Disney, a September fiscal year company, posted Q2 (January to March this year) revenue of $25.2 billion, up 22.6% year-on-year. However, operating profit decreased by 20.8% to $4.8 billion. While revenue increased due to the acquisition of 21st Century Fox last year, operating profit declined as the theme park division, which attracts large crowds, saw a 57.6% drop in operating profit due to the impact of COVID-19.
Nevertheless, Walt Disney is considered one of the companies expected to achieve long-term growth based on its global intellectual property (IP) competitiveness. Last year, Walt Disney launched Disney+ to participate in the global online video service (OTT) competition.
Shin Su-yeon, a researcher at Shin Young Securities, said, "As platform competition intensifies, content competitiveness becomes crucial. Walt Disney possesses a competitive library and also has content production and planning capabilities, raising expectations for content produced on this channel in the future. Although there is a short-term impact on performance due to COVID-19, it is a company expected to achieve long-term growth based on global IP competitiveness."
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Walt Disney operates various content businesses including broadcasting channels, theme parks and merchandise sales, film studios, and OTT. Its strength lies in its outstanding IP competitiveness, having successively acquired content producers such as Pixar, Marvel, Lucasfilm, and 21st Century Fox. Researcher Shin explained, "Last year, they launched the OTT platform Disney+ utilizing these assets," adding, "In Korea, CJ ENM has a similar business structure."
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