Amid all reports of Walt Disney taking a hard look at Star India, company’s CEO Bob Iger on Wednesday said that linear business in India “does quite well” and that they would like to “stay” in the Indian market.
Walt Disney has come out with its fourth quarter earnings report in which it has reported a revenue jump of 5% compared to the same quarter previous fiscal.
The company has reported a revenue of $21.24 billion for the fourth quarter ended September 30, 2023, up from $20.1 billion in the same quarter prior year.
Annually, the company's revenue increased by 7% from 2022 to 2023.
In its earnings call, the global giant said that its total operating income from all segments stood at $2.9 billion, up by $1.4 billion Y-o-Y in Q4 this year from $1.5 billion in the same quarter previous fiscal.
Walt Disney’s total entertainment revenue, which includes linear networks, direct-to-consumer and content sales/licensing, increased by 2% this fiscal from $9.2 billion in Q4 2022 to $9.5 billion in Q4 2023.
The company, however, reported a 9% decline in revenue from linear networks in the entertainment segment in Q4 FY23 and attributed a 21% drop in sports revenue to Star (India).
In the sports segment, revenue from Star India stood at $92 million for the fourth quarter this fiscal, down from $116 million in the same quarter last year.
The operating income from Star India also saw a decline of 29% in Q4 FY23 from $17 million to $12 million.
However, the overall revenue from the sports segment remained stagnant for Q4 FY23 and Q4 FY22 at $ 3.9 billion.
Including ESPN +, the combined streaming businesses had an operating loss of $0.38 billion in the 4th quarter, the company’s interim CFO Kevin Lansberry said during the investors’ call.
On linear networks, Lansberry said, “We don't expect linear progress from quarter to quarter. At linear networks, which now excludes our sports channels, was flat to the prior year, reflecting lower advertising and affiliate revenues, generally offset by a decrease in marketing and programming and production costs.”
He further said that Q4 operating income increased by 14% versus the prior year as results were driven by the domestic ESPN business.
Talking of subscribers, Bob Iger, CEO, Walt Disney, said that core Disney+ subscribers have now reached over 112 million as of the end of fiscal '23, including the nearly 7 million gained in Q4 alone.
However, the subscriber base for Disney+ Hotstar reduced from 40.4 million in Q3 FY23 to 37.6 million in Q4 FY23.
“Ad-supported Disney+ product grew by 2 million subscriptions to a total of 5.2 million. In fact, more than 50% of Q4 new U.S. subscribers chose an ad-supported Disney+ product. And over the past six months, these subscribers spent 34% more time watching the service,” Iger said.
Growth in entertainment DTC advertising revenue of 4% in Q4 versus the prior year partially offset linear ad declines, the company said.
The CEO said that in terms of advertising, linear is a little bit stronger than expected.
“It's not back as much as we would like. But we've seen some slight improvements. Actually, the tech sector is still somewhat weak. But in general, overall, advertising has improved. We're finding obviously great demand for addressable advertising,” he said.
“And in general, sports has been very, very strong. So, as we look at the advertising marketplace right now, while it's not as strong as we would like it to be, it's certainly not as bad as some people think it is. And it's working for us,” Iger added.
According to its top bosses, the thorough restructuring of Walt Disney has enabled tremendous efficiency.
“We're on track to achieve roughly $7.5 billion in cost reductions, which is approximately $2 billion more than what we targeted earlier this year,” they said.
The company has also eliminated over 8,000 roles as a part of its cost-saving and streamlining operations.
“And while we are not currently planning to make further large-scale reductions to our workforce, we are taking significant concrete steps to continue addressing the cost basis of the overall company,” Lansberry said.