Disney have released it’s first quarter 2019 financial results, which include details on how the Direct To Consumer and International division is currently performing.
Here is the official statement:
Direct-to-Consumer & International revenues for the quarter decreased 1% to $918 million and segment operating loss increased from $42 million to $136 million. Revenues reflected a 4% decrease from an unfavorable foreign currency impact.
The increase in operating loss was due to the investment ramp-up in ESPN+, which was launched in April 2018, a loss from streaming technology services and costs associated with the upcoming launch of Disney+, partially offset by an increase at our International Channels and a lower equity loss from our investment in Hulu.
The increase at our International Channels was due to lower costs, affiliate revenue growth and higher program sales (all on a constant currency basis), partially offset by an unfavorable foreign currency impact. Hulu results reflected increases in subscription and advertising revenue, partially offset by higher programming costs.
Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company said:
“After a solid first quarter, with diluted EPS of $1.86, we look forward to the transformative year ahead, including the successful completion of our 21st Century Fox acquisition and the launch of our Disney+ streaming service. Building a robust direct-to-consumer business is our top priority, and we continue to invest in exceptional content and innovative technology to drive our success in this space.”
My Take: This news wasn’t a huge surprise, Disney released some financial details recently showing how much the division had been losing in the process of building up its new streaming services ESPN+ and Disney+. At the moment, Disney+ is just costing money until it launches, but Disney have been planning on this, because they are looking for the long game with the new streaming service.