Disney Stock Falls After Recent 2023 Earnings Report

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Disney Stock Falls After Recent 2023 Earnings Report

By Movieguide® Staff

As Disney tries to stabilize with Bob Iger’s return, stock continues to fall for the leading entertainment company due to uncertainty over the future of its streaming platforms.

According to Variety, Disney shares dropped 9% on May 11, after the company released its earning reports for 2023.

Variety reported:

As of 11:30 a.m. ET, Disney’s stock price was $92.86/share, down 8.2%, and off its 52-week high of $126.48.

Disney+ lost 4 million subscribers for the quarter ended April 1, including a loss of 300,000 in the U.S./Canada. But the company narrowed its streaming losses by $400 million, down 26% year over year, and Disney said it would remove content from Disney+ to cut costs while also expecting to raise prices on the ad-free Disney+ tier. In addition, CEO Bob Iger announced that the company would launch an integrated Disney+/Hulu “one-app experience” in the U.S. by the end of 2023 — indicating Disney’s desire to hold on to Hulu.

Disney continues to lean into expanding its streaming services, despite its quarterly losses.

MoffettNathanson senior analyst Michael Nathanson writes: “As a result, any commentary about cost savings and revenue synergies that would arise from uniting Hulu and Disney+ globally will have to wait until this tug of war is resolved… the long-term profit picture should be brighter than the market knows and thus we think the stock is undervalued.”

However, Disney’s investment into Hulu, ESPN and other content will mean little should they continue to misfire with their movie releases.

Despite their progress from cost-cutting and a recent wave of firings, the company lost hundreds of millions of dollars with both its release of LIGHTYEAR and STRANGE WORLD.

“Coming off a round of layoffs and restructuring, Disney is starting to make some progress at reining in costs,” Third Bridge analyst Jamie Lumley wrote. ‘However, the direct-to-consumer segment continues to be a loss-leader and there remains a gap between where the company is and where it wants to be.”

While mainstream media could point to several contributing factors as to why that gap exists, it is undeniable that Disney creatives are out of touch with their main audiences: families.

Movieguide® previously reported on new shows coming to streaming that will likely ostracize their audience further:

Disney+ has greenlit a new German original series, PAULINE, that follows a love story between a teenage girl and the devil.

At one time, Walt Disney Studios and its streaming platform Disney+ prided itself on family-friendly movies and series.

However, in an effort to build their streaming catalog and reach a more global audience, Disney+ has accepted more media with immoral, sexualized content.

Movie-goers witnessed Disney’s lack of audience awareness last year after the company lost over $100M each for their animated movies, LIGHTYEAR and STRANGE WORLD.

The solution remains the same for Disney, return to the moral content that defines much of the company’s historic library and reconcile with their family audiences.