Four months ago, nearly any company in the world would have killed to have the revenue, diversified portfolio and name recognition of the Walt Disney Company. However, in the midst of the coronavirus pandemic, The House of Mouse has been brought to its knees in a way that no competitor could ever have hoped to accomplish.
COVID-19 seems almost tailor-made to strike at Disney’s revenue streams. Recent reports even show that Disney’s company and stock value has fallen below entertainment rival Netflix. For its part, Netflix has only thrived with the current stay-at-home orders in effect.
Closing out 2019, Disney had nine films gross over $1 billion, including “Avengers: Endgame” becoming the highest-grossing film in history. C.E.O Bob Iger even pulled the trigger on buying out longtime rivals 21st Century Fox. Disney Parks and resorts brought in $24.5 billion, an increase of over $4 billion from 2018. And expectations only grew bolder with three new cruise ships in production to bolster Walt’s intimidating naval fleet. ESPN brought in $3 billion and has become ubiquitous in the realm of sports entertainment. Disney even took the dive into the competitive realm of online streaming platforms, releasing Disney+ at the close of the year. The public didn’t find out until February 2020, but Iger deemed these conditions to be enough to cement his legacy as one of the most successful C.E.O.s and businessmen in history.
In the past, Disney’s diversified revenue streams had been one of its greatest strengths. The characters from films fed into the prominence of the parks and resorts. Advertising on ESPN or other Disney owned television channels promoted films, merchandising and travel. Each aspect of the business supported the endeavors of the others. This allowed for high-profile, lucrative purchases, which only further strengthened the grasp on many of the largest franchises in popular culture.
The film industry has essentially ground to a halt, with anything in-production either being suspended indefinitely or dropped altogether. Finished films too are either being held for a theatrical release when theaters reopen or are being shunted off into streaming releases. Without professional and collegiate sports, ESPN has taken to speculative analysis, documentaries and e-sports with athletes playing.
The shutdown of Disney parks and resorts has been the deepest cut to the company’s standing. The revenue brought in from parks and resorts dwarfs even the film divisions profits. Would-be park attendees seem to be a very vocal and angry group, even with so the rest of the world seemingly understanding the need for social distancing. Workers United Local 50 in California estimates more than 30,000 workers have been furloughed, and 43,000 in Florida, with some estimates exceeding 100,000 workers laid-off.
Voices within the company and analysts suspect this is one aspect that is not going to come back in the near future. Disney’s worst/Netflix’s best day on the stock market came when it was suggested that Disney parks and resorts might not reopen until January 2021. UBS Financial Analyst, whose downgrade of Disney’s stock stirred much of the current market prophesizing, said California Governor Gavin Newsom has said the prospect of mass gatherings is “negligible at best until we get herd immunity and we get to a vaccine.” And it’s impossible to say if the cruise line industry will ever shake this black mark on their already spotty record. According to Forbes, all of this adds up to the tune of Disney losing as much as $30 million a day.
The one bright spot for the House that Mickey Built is the company’s streaming service Disney+, which has reportedly grown from an initial subscriber base of 10 million to nearly 50 million as of April. This is due to the current stay-at-home orders, as well as rolling out to markets internationally.
However, where flames grow for Disney+, a bonfire roars at Netflix. Where Disney blossomed by its diversified portfolio and in-person, experience-based parks and resorts, Netflix owns the living rooms of over 165 million subscribers worldwide according to Business Insider, and that comes from a report at the end of January. What’s more: Each one is paying between $8.99 and $12.99, compared to $6.99 for Disney+. And Netflix is not likely to feel the hurt anytime soon. All television and film services are facing the day when there is nothing new to show due to the current halt in production. But Netflix reportedly has more in their pipeline than most.
Also, subscribers are likely to rewatch something from their vast catalogue of hit shows. And amazingly, the halt in production has actually meant that less money is going out than in the past for Netflix, so the current market has only shown greater profits.
The current pandemic will likely not take down the giant that is The Disney Company. Stock analysts across the board are telling investors that the company is likely to have a tough time for the next couple of years but will eventually bounce back. However, it is assured that coronavirus is going to have far reaching effects on many facets of entertainment, especially for how Disney moves forward. One thing is clear, the world is watching how the titan of business and entertainment can come back.