On August 10, The Walt Disney Company held its Third Quarter Earnings Call and, overall, the news was incredibly positive. Disney surpassed Wall Street expectations, making $21.5 billion in revenue when expectations were only about $21 billion. Disney was also pleased with its Disney+ streaming numbers and said that they plan to have the platform profitable by 2024. Although there was an “unfavorable attendance mix” at Disneyland Resort in California, the Parks overall saw a big increase in revenue, since they are all open once again.
The Earnings Call marked a positive spot in Walt Disney CEO Bob Chapek’s two-year tenure. Chapek had been struggling since he became CEO in 2020, but he is working hard to turn things around and increase people’s positive perception of him. After the Earnings Call, Chapek sat down with CNBC to discuss the direction the company is heading in. However, it may not have been his words that people were most struck by. When the interview began, people quickly noticed that the typically clean-cut Chapek was now sporting a beard.
During the interview, the Disney CEO was asked about Disney’s decision to increase prices drastically for Disney+. Currently, Disney+ costs $7.99 per month with no ads. However, on December 8, Disney will launch an ad-supported tier, which will cost $7.99 per month, and Disney+ without ads will increase to $10.99 per month. Chapek said:
We thought that this was the perfect time to go ahead and really sort of bring up that price/value equation so that we’re more accurately reflecting the value that a Guests or a consumer reviewer gets with Disney+ by taking up the price.
You can watch the interview below:
Chapek also said that they saw strong numbers in their theme park attendance — even though Disneyland Resort had an “unfavorable attendance mix”. Chapek said that there was a 40% increase in spending, which he credited to happy Guests visiting and wanting to spend more money. However, it should be noted that things at Disney Parks have gotten more expensive across the board — from individual ticket prices to merchandise and food.
Chapek also believes that people are willing to spend more with Disney because of how diversified it is. Disney does not just produce the family-friendly entertainment it is known for. Disney also owns Hulu, which allows it to create a lot of different types of content. Furthermore, Disney owns Marvel and LucasFilm, which has allowed the company to expand on those incredibly popular universes.
After the positive Earnings Call, Disney’s stock jumped nearly 10% in pre-market trading, closing out the day with stocks nearly 5% higher.