Disney+ subscriptions soar
Shareholders learn of 100-million milestone, a bright spot in a year of COVID challenges.
Walt Disney Co.’s key streaming service Disney+ has surpassed 100 million subscribers in the 16 months since it launched, Chief Executive Bob Chapek said during the company’s annual shareholder meeting Tuesday.
Disney’s milestone is a heartening development for a company that has weathered extraordinary challenges because of the COVID-19 pandemic.
The subscriber count is up from the 94.9 million accounts Disney reported last month for the quarter that ended in January. And the surge — fueled by hits such as “The Mandalorian” and “WandaVision” — has encouraged the company to spend more on growing its streaming businesses. Disney in December unveiled an aggressive plan to ramp up programming for the service to 100 new titles a year.
“Our direct-to-consumer business is the company’s top priority, and our robust pipeline of content will continue to fuel its growth,” Chapek said.
The success of Disney+ stands in eye-popping contrast to other parts of Disney’s business that the pandemic has grounded for much of the last year.
Disneyland Resort in Anaheim has been closed since March 2020, and the closure of parks, cruise lines and movie theaters has weighed heavily on the company’s finances.
Disney lost $2.8 billion in fiscal 2020. First-quarter net income for 2021 fell 99% to $29 million, compared with a profit of $2.13 billion a year earlier.
But Chapek gave shareholders reason to believe that the worst is in the past, saying the company aims to open Disneyland Resort by “late April.” He did not give a specific date.
This comes after state officials on Friday said California theme parks and sports stadiums will be allowed to welcome back visitors as early as April 1, with capacity limits.
“The fact is, it will take some time to get [the parks] ready for our guests” and retrain the more than 10,000 furloughed “cast members” waiting to get back to work, Chapek said.
The shareholder meeting, where investors get to ask management an eclectic array of questions, comes just over a year after Chapek took over from Bob Iger, who became executive chairman in February 2020. Iger opened the event by confirming that this was his final shareholder meeting before he leaves at the end of December, as planned.
Shareholders approved the company’s compensation plan for Disney’s top executives, with 68% voting in favor and 31% casting ballots against it.
Disney’s executive leadership went without bonuses in fiscal 2020, during which the company laid off thousands of workers. That resulted in significant reductions in overall compensation for Disney bosses, whose pay is weighted toward performance-based rewards rather than base salaries.
Chapek, in his first year as CEO of the Burbank entertainment giant, had a total compensation package worth $14.2 million, including his salary and stock awards, according to Disney’s annual proxy report. Iger had a total compensation package worth $21 million in fiscal 2020, representing a 56% decline from the prior year.
Disney investors rejected two shareholder proposals, including one requesting public disclosure of lobbying activities. Disney in January, along with other companies, pledged to not contribute to campaigns for politicians who declined to certify Joe Biden’s election as president.
The other rejected proposal requested that nonmanagement employees be included on director nominee candidate lists.
The fate of theatrical movies remains in question, despite New York City opening cinemas last week. Chapek mentioned Marvel’s “Black Widow” as the company’s next major release, which is “currently” scheduled for May 7. It’s still unclear whether the date will stick after Universal Pictures pushed “F9” back by a month to June 25.
On parks, Chapek touted several projects in the works, including the Marvelthemed Avengers Campus coming to Disney California Adventure later this year, as well as a “Zootopia” land at Shanghai Disneyland. A fifth cruise ship, called Disney Wish, is poised for its maiden voyage in summer 2022.
The Q&A session included some queries about lightning-rod topics.
One shareholder asked why the Disney Animation feature “Raya and the Last Dragon” wasn’t playing at certain theaters. “Raya,” which opened last weekend, didn’t show in Cinemark cinemas because the theater chain rejected Disney’s terms on splitting box office revenue.
Another asked about the firing of “The Mandalorian” star Gina Carano over what Lucasfilm described as “abhorrent” social media posts and suggested that Disney had different standards for conservative and liberal political expression. Chapek said he didn’t see the company as being either left- or right-leaning, but rather as “standing for values ... that are universal.”
Yet another caller asked whether Disney planned on “firing” Lucasfilm President Kathleen Kennedy, who has presided over blockbuster films and the company’s successful push into streaming TV, but has made decisions that rankled certain ardent fans of the franchise. Chapek strongly rejected the notion, saying he looked forward to Kennedy “directing the activities of the entire Lucasfilm organization for many years to come.”
Disney’s stock has been on a tear during the last year, surging to records of more than $200 in recent days, more than double where it was trading when the coronavirus upended the U.S.
The shares fell $7.40, or 3.7%, to $194.51 on Tuesday.