Online Streaming Services Stand Strong Amid Pandemic
Companies big and small have largely been adversely affected by the global pandemic. Disney is no exception. The entertainment giant reported that its Disney Parks, Experiences, and Products department saw quarterly losses amounting to $119 million as revenue declined 53% to $3.6 billion. These numbers directly reflect the consequences of having to shut down or substantially reduce capacity in parks like Walt Disney World and Disneyland, as well as many of the Disney Cruise Line routes. The company estimates $2.6 billion net operating income losses for the quarter due to the virus.
Despite the losses of Disney’s in-person experiences and businesses, other departments demonstrated immense growth. In November 2019, the company launched its online streaming service, Disney+. Featuring flagship movie franchises, childhood favorites, and new exclusive content, the online streaming business experienced rapid growth, garnering over 26 million subscribers by February 2020. Today, the company reports 94.9 million subscribers to Disney+. Furthermore, Disney Media and Entertainment Distribution produced $12.66 billion in revenue for the quarter.
The giant entertainment company and online streaming business, which boasts a market cap of $346.36 billion, saw its stock price rise nearly 3% to $193.89 per share after market hours in the wake of the financial report.
Disney’s Competition Is Fierce in the Online Streaming Business
Though the growth in subscribers for Disney’s online streaming business bodes well for the future of the platform, the market is flush with competitors as more and more companies, including Apple, throw their names into the ring. Netflix, whose stock is worth $557.59 per share, reported a 23% increase year-over-year (YOY) in average paid subscriptions for Q4 2020, breaking over 200 million subscribers. Netflix posted $6.6 billion in revenue for its business quarter. AT&T’s HBO and HBO Max now hold 41.5 million domestic subscribers. Ecommerce giant Amazon also has its own online streaming business, Amazon Prime Video, which saw its strongest viewership for live sports in Q4 2020. TV+, offered by tech giant Apple, was reported to have nearly 10 million subscribers last year.
About the Author
James White is a Michigan State University graduate with a B.S. in Environmental Biology. He is interested in reporting emerging trends in technology, especially with regard to alternative energy and environmental conservation.