Crowded streaming

Editor’s note: This article is from the micro-channel public number “poison eye” (ID: DomoreDumou), Author: Chen Bin, Editor: Zhang Friends.

In the past month, North American entertainment giants have announced financial reports. As Hollywood producers turn to online, each has highlighted the performance of its own streaming media platform, which has also become an excellent opportunity to understand the competitive situation.

Among them, the “dual matchup” between Disney and Netflix is ​​particularly eye-catching: After Disney’s offline business was hit hard, the number of Disney+ subscriptions soared by 258% year-on-year. Within a year, its streaming media grew by nearly 100 million users, becoming a traditional company A representative case of transformation.

Netflix’s global subscriptions exceeded 200 million, and the free cash flow for the whole year of 2020 will be positive, and Netflix will continue to hold the top spot in streaming media. New entrants, including HBO Max and Peacock, also made the outside world shine and became the most prominent items in the parent company’s financial report.

Disney shows determination to switch network

On February 11, Disney announced its first quarter earnings report as of January 2, 2021.

The financial report shows that Disney’s total revenue for the quarter was US$16.249 billion, down 22% from US$20.877 billion in the same period last year; operating profit fell from US$3.996 billion to US$1.332 billion, a 67% drop. Even though the streaming media business has made great progress, the drop in offline park revenue has turned from profit to loss, which has become the main reason for Disney’s year-on-year decline.

In October last year, Disney announced a comprehensive adjustment to its organizational structure.

The three independent content-related business segments-media network, film and television entertainment, direct-to-consumer and international-were merged and reorganized to establish a unified “Disney Media and Entertainment Distribution” department, responsible for Disney’s content Global distribution. The offline formats are all under the “Disney Parks, Experiences and Products” department, responsible for theme parks, cruises, and derivative sales.

However, under the newly established “Disney Media and Entertainment Distribution” department, there are still three business lines-wired network, content sales/licensing, and direct-to-consumer reporting, which can be compared with the previous Roughly correspond to each section.

In terms of breakdown, cable networks covering mainstream channels such as ABC TV, ESPN and National Geographic (LiNear Networks) performed steadily, with revenue in the quarter reaching US$7.693 billion, an increase of 2% compared to the same period in 2019; at the same time, its operating profit was US$1.729 billion (down 4% year-on-year), which is still Disney’s most important “cash cow”.

Under the background of the booming streaming media, Direct-to-Consumer has achieved rapid growth, with revenue soaring 73% to 3.504 billion US dollars in the quarter.

After the offline park suffered heavy losses, streaming media took advantage of the momentum to fill the vacancy. The contribution value of the two has been nearly the same, becoming Disney’s new business pillar. Although the sector still recorded a net loss of US$466 million, the US$1.11 billion in 2019 has narrowed significantly.

As of January 2, the number of Disney+ subscribers reached 94.9 million, compared with the 86.8 million announced on the “Investor Day” in December last year, an increase of 8.1 million in just one month; compared to 2019 The 26.5 million at the end of the year has soared by 258%. In addition, the number of subscriptions for Hulu (including Live TV) and ESPN+ was 39.4 million and 12.1 million, respectively, both recording double-digit growth rates year-on-year.

According to this calculation, the total number of subscriptions to Disney’s streaming media reached 146 million, further narrowing the gap with the leader Netflix.

However, Disney’s average subscription fee has gone up and down. Among them, the monthly expenditure for a single user of Disney+ was US$4.03, which was significantly lower than the US$5.56 at the end of 2019. This is related to the lower package price after Disney+Hotstar went online. The subscription fees of Hulu and ESPN+ have increased, indicating that these two services have entered a profit harvesting period in China.

Finally, content sales/licensing (Content Sales/Licensing) quarter revenue was 1.702 billion U.S. dollars, plummeting 56% year-on-year in 2019; operating profit was 188 million U.S. dollars, a sharp drop of 76%. After multiple rounds of file withdrawals and theater closures, only “Spiritual Journey” was released in overseas markets during the quarter. In 2019, there were strong films such as “Frozen 2” and “Star Wars: The Rise of Skywalker”. The decline is not surprising.

It is worth mentioning that in early February, Disney announced that it would close the “Blue Sky Studio” acquired from 20th Century Fox, which produced “Ice Age” and “Rio Adventure” etc.The series of famous animation brands came to an end.

In a statement released to the public, Disney stated that “current economic reality” was the primary factor in making this decision. However, Disney originally had its own animation studio and Pixar two major labels, and the works launched by “Blue Sky Studio” in recent years have also received mediocre response. The fate of being shut down may have been written long ago.

After the above lines are summarized in the “Disney Media and Entertainment Distribution”, the revenue and profit of this department were US$12.661 billion and US$1.451 billion, respectively, maintaining a single-digit decline year-on-year.

In contrast, the “Disney Parks, Experiences, and Products” division continued its downward trend, with revenue plummeting 53% to 3.588 billion U.S. dollars during the quarter, and it turned from a profit of $2.522 billion last year to a loss of $119 million.

Disney’s offline business bears the brunt of the global “blockade orders”. Its related ticket, catering, and travel revenues have fallen by more than 60%. It is expected that financial performance will remain under pressure in the short term. However, derivatives licensing and retail sales achieved 2% growth, mainly driven by the “Mandalorian” episodes and “Spiderman” games.

“The Mandalorian” Season 2 stills

Overall, after Disney fully embraces streaming media on the content side, the number of subscribers and paid revenue will become the future growth engine, and the tilt effect of the supply of film and television projects will become more and more significant; and the number of tourists from many places gradually picks up , Disney’s offline business is expected to rebound from the trough, and the darkest moment may have passed.

After the financial report was announced, Disney’s investors once reacted positively. In the after-hours trading of the day, the stock price had risen by 2%, and then fell from a high of more than $190. As of February 19, it closed at 183.65. Dollar.

The heroes compete in the streaming media battlefield

The streaming media business also occupies a prominent position among companies that have announced their earnings reports recently.

First look at Netflix. On January 19, Netflix announced financial data for the fourth quarter in an investor letter: Netflix’s revenue for the quarter reached US$6.644 billion, a year-on-year increase of 21.5%; net profit fell slightly by 8% to US$542 million.

By the end of 2020, NetflThe number of ix global paying users reached 204 million, of which 36.57 million were added during the year, helping Netflix reach a new milestone. At the same time, Netflix’s average monthly expenditure per user has increased from US$10.82 to US$10.91 (an increase of 1%), continuing to maintain a healthy growth of both volume and price.

For the whole year of 2020, Netflix added 6.27 million paying subscribers in North America, a year-on-year increase of 9%, a record high in recent years. However, Netflix’s overseas subscriber growth is even more significant, with Asia Pacific (57%), Europe, Middle East and Africa (29%) and Latin America (19%) all outperforming the local.

From the perspective of cumulative paying users, the gap between North America (73.936 million) and Europe, the Middle East and Africa (66.698 million) is rapidly narrowing, while the penetration rate of Latin America (37.537 million) and Asia Pacific (25.492 million) is not high. .

The achievement of these numbers relies on Netflix’s original output.

The popular drama series represented by “Raising a Tiger” and “Abandoning Soldiers on the Back Wings” are relayed online, plus film projects such as “The Gangster and My 365 Days” and “Miss Holmes: The Missing Marquis” , Provides ample content supply for Netflix.

In the fourth quarter alone, Netflix launched the fourth season of “The Crown”, “Bridgetown” and other dramas and movies such as “Midnight Sky” and “Nationwide Little Hero” to maintain momentum for subscriber growth.

The fourth season stills of “The Crown”

On January 27th, Warner Bros. parent company AT&T also announced its latest quarterly financial report. According to reports, AT&T’s total quarterly revenue was US$45.7 billion, compared with US$46.8 billion in the same period last year; it recorded a loss of US$10.7 billion in the quarter, compared with a net profit of US$5.3 billion in the same period last year.

However, the biggest highlight of this financial report comes from Warner’s streaming service HBO Max: Since its official launch on May 27, the number of local subscribers of HBO Max and HBO has reached 41 million, and the number of subscribers globally is close to 6,100. Million, to complete the expected goal two years in advance.

Since the third quarter, the number of HBO Max activations has doubled to 17.2 million, which is inseparable from the “Wonder Woman 1984” that appeared in the “Christmas File”. With more new Warner movies this yearProgress in depth.

In the ascendant of streaming media, Hollywood’s every move will still affect the future of the industry.