Disney’s performance this year may not be outstanding, but this is accumulating power for its next 100 years.
Editor’s note: This article is from WeChat public account “ 三 文 娱乐 ” (ID: hi3wyu ), author: Dkphhh.
On November 20, Disney announced the annual report for the September 28, 2019 on the official website of the US Securities and Exchange Commission:
-
Annual revenue was US $ 60.542 billion, a year-on-year increase of 19%.
-
The net profit attributable to mothers was US $ 11.054 billion, a year-on-year decrease of 12%.
-
Net profit from main business was 10.913 billion US dollars, a year-on-year decrease of 16%.
This annual performance is the same as what we estimated in the analysis of Disney’s fourth quarter financial report, which means that Disney calculated a profit by including a gain of approximately $ 4.8 billion from the early revaluation of Hulu’s equity acquisition .
After removing these gains, Disney’s motherhood net profit is only about $ 6.2 billion, which is a direct decline of half from the $ 12.598 billion profit in 2018.
However, falling profits are also expected. This year is Disney’s transformation year. Restructuring Fox, investing in streaming media, and building new paradise will cost you everything. The annual report revealed that just reorganizing Fox had spent $ 1.2 billion this year.
In terms of cash flow, Disney’s free cash flow for fiscal year 2019 was $ 1.108 billion, a decrease of $ 8.722 billion from the previous fiscal year.
Because these expenses are necessary sacrifices for the transformation, Disney’s stock price has not been affected at all. After Disney + ‘s streaming platform Disney + officially launched, Disney’s stock price even hit a recordIt hit a new record high of $ 148 per share. This shows that the outside world is full of confidence in Disney’s transformation.
This annual report also details the operation of each Disney business. We will start with the business and review Disney’s 2019.
Revenue is up 13% year-on-year but profits are only up 2%, and the media network is showing signs of decline
-
Media network business revenue was US $ 24.827 billion, accounting for one-third of total revenue.
-
The operating profit of the media network business was US $ 7.479 billion, accounting for half of the total operating profit.
In terms of numbers, media networks are still the most important source of revenue for Disney, but in terms of growth rates, the media network business has shown signs of slump-revenues have increased 13% year-on-year but profits have only increased 2%.
The reason for the increase in revenue is very simple. After the acquisition of Fox, Fox’s FX TV network and National Geographic Channel were merged into Disney’s media network business, which resulted in increased advertising fees and content licensing fees.
However, after the acquisition of Fox, the expenses of the business units have also increased, with operating expenses up 17% year-on-year and market and administrative expenses up 24% year-on-year.
The drastic changes in the streaming media market have actually affected the media network business.
Disney mentioned in its financial report that subscribers and program ratings of its television networks have declined. It is no surprise that this is affected by streaming media. Another point is that Disney ’s TV production department no longer develops Marvel TV series such as Tekken and Daredevil for Netflix, which is equivalent to a large amount of content production revenue. This is related to Disney’s strategic transformation. After officially entering the streaming media market, Disney stopped most of its cooperation with other streaming media platforms.
Dreaver
Disney’s media network business is at a transition point. In the past, he was an important position to output Disney content and brands to the audience, and now we can see that the media network department is moving from front to backstage. As a communication channel, TV networks are behind the times, but the TV content production experience they have accumulated in the past can be seamlessly transferred to streaming media.
During the fourth quarter earnings call, Disney CEO Bob. Iger said that FX and Fox searchlights will be included in Hulu, Disney’s adult-oriented streaming media platform, starting in March next year, to help them produce original content. On the Disney + first release list, we also saw a lot of content produced by the original TV production department, such as ABC Studios’ variety show “Encore!” And the documentary “Ink & Paint”.
Park revenue is steadily increasing but the number of tourists is declining
The park, experience and product business consists of two parts, one is the park and resort business, and the other is the licensing and retail business.
-
Park, experience and product business revenues were US $ 26.225 billion, a year-on-year increase of 6%
-
The operating profit of the park, experience and product business was US $ 6,758 million, an increase of 11% year-on-year.
-
Parking and resort business revenue was US $ 21.592 billion, up 6.4% year-on-year.
-
Authorization and retail business revenues were US $ 4.633 billion, a year-on-year increase of 5.1%.
The overall business of the park and resort area is still growing steadily, but this year it has not performed well. The growth in the number of visitors to domestic parks in the United States has stagnated, and the number of visitors to overseas parks has fallen by 7%, which has led to a 2% decline in overall visitor numbers this year.
According to the financial report, the decline in tourist numbers mainly comes from Shanghai Disneyland. This may be related to the turbulent “tourist bringing food into the park” incident in the middle of the year.
Also, Hong Kong Disneyland has experienced performance problems due to the riots in the past six months. During the fourth fiscal call, Disney CEO Bob Iger said that Hong Kong Disneyland ’s revenue in the fourth quarter fell by 55 million U.S. dollars and is expected to fall by 80 million U.S. dollars in the first quarter of next year. The annual revenue of the park will fall by about $ 275 million.
In the United States, Disney ’s newly-built Star Wars: Galaxy’s Edge has also fallen short of expectations. The new park will cost $ 1 billion. But from the financial report, this new park has not brought more tourists. To this end, Catherine Powell, a 15-year-old Disney executive, announced his resignation in September this year.
However, under such difficult circumstances, the park business still made a profit of US $ 4.919 billion, with a profit margin of 22.78%.
The increase in revenue and profits of the park is mainly due to price increases. Tickets are up, so are consumer goods in the park. In addition, the occupancy rate of hotel rooms operated by Disney increased by 1% from last year to 88%. At the same time, consumption per room also increased, from $ 338 to $ 348.
Derivatives and retail business are divided into two parts. Derivatives are mainly the authorization of Disney’s IP to derivative manufacturers. Retail is Disney’s own retail store. According to the financial report, Disney currently has about 330 stores worldwide, of which 200 are in the United States, 50 in China and Japan, and the rest are mainly in the
Media network business revenue was US $ 24.827 billion, accounting for one-third of total revenue.
The operating profit of the media network business was US $ 7.479 billion, accounting for half of the total operating profit.
The park, experience and product business consists of two parts, one is the park and resort business, and the other is the licensing and retail business.
-
Park, experience and product business revenues were US $ 26.225 billion, a year-on-year increase of 6%
-
The operating profit of the park, experience and product business was US $ 6,758 million, an increase of 11% year-on-year.
-
Parking and resort business revenue was US $ 21.592 billion, up 6.4% year-on-year.
-
Authorization and retail business revenues were US $ 4.633 billion, a year-on-year increase of 5.1%.
The overall business of the park and resort area is still growing steadily, but this year it has not performed well. The growth in the number of visitors to domestic parks in the United States has stagnated, and the number of visitors to overseas parks has fallen by 7%, which has led to a 2% decline in overall visitor numbers this year.
According to the financial report, the decline in tourist numbers mainly comes from Shanghai Disneyland. This may be related to the turbulent “tourist bringing food into the park” incident in the middle of the year.
Also, Hong Kong Disneyland has experienced performance problems due to the riots in the past six months. During the fourth fiscal call, Disney CEO Bob Iger said that Hong Kong Disneyland ’s revenue in the fourth quarter fell by 55 million U.S. dollars and is expected to fall by 80 million U.S. dollars in the first quarter of next year. The annual revenue of the park will fall by about $ 275 million.
In the United States, Disney ’s newly-built Star Wars: Galaxy’s Edge has also fallen short of expectations. The new park will cost $ 1 billion. But from the financial report, this new park has not brought more tourists. To this end, Catherine Powell, a 15-year-old Disney executive, announced his resignation in September this year.
However, under such difficult circumstances, the park business still made a profit of US $ 4.919 billion, with a profit margin of 22.78%.
The increase in revenue and profits of the park is mainly due to price increases. Tickets are up, so are consumer goods in the park. In addition, the occupancy rate of hotel rooms operated by Disney increased by 1% from last year to 88%. At the same time, consumption per room also increased, from $ 338 to $ 348.
Derivatives and retail business are divided into two parts. Derivatives are mainly the authorization of Disney’s IP to derivative manufacturers. Retail is Disney’s own retail store. According to the financial report, Disney currently has about 330 stores worldwide, of which 200 are in the United States, 50 in China and Japan, and the rest are mainly in the