Disney's theme park performance this season is impressive, surpassing its performance before the epidemic, and the company attributes it to the newly launched Disney Genie. As soon as Disney's third quarter report for 2022 was released, the outside world was applauded because its

Disney theme parks have performed well this season, surpassing their performance before the epidemic, and the company attributes it to the newly launched Disney Genie. The picture comes from Disneyland official website

Disney's third-quarter report for 2022 was released, and the outside world was applauded because its streaming platform Disney+ added 14.4 million new subscribers.

As a newcomer in the streaming field, Disney+ directly beats the veteran player Netflix.

In contrast, Disney, according to financial reports, as of July 2, Disney+ had 152.1 million subscribers worldwide. With Hulu and ESPN+, the total number of subscribers to Disney's streaming platform has reached 221.1 million, surpassing Netflix's 220.7 million.

Indeed, in the current global political and economic situation and high inflation pressures in North America, it is not easy for Disney to achieve such achievements in the global streaming market. After the

performance was announced, Titanium Media APP observed that Disney's stock price jumped nearly 7%.

However, one situation may be ignored. Almost all of Disney+'s new users this season come from markets outside North America. This quarter, Disney only added 100,000 new users in the US market.

, and Disney+'s total number of users also comes from emerging markets, including Hotstar, a joint venture in India, which brings more than one-third of Disney+'s total number.

In other words, its core user base is also facing a weak growth situation. At the same time, users are highly dependent on emerging markets, which also means that the subsequent ceiling is lower in terms of subscription price increases and commercialization performance such as advertising.

Moreover, this quarter, Disney CEO Bob Chapek was proud of Disney's streaming segment business, which covers Disney+, had an overall loss of up to US$1.1 billion.

1, paid members can't stand it. Disney+'s first advertising version

data shows that Disney's revenue in the third quarter of fiscal year 2022 was US$21.504 billion, a year-on-year increase of 26%; net profit attributable to the company was US$1.409 billion, a year-on-year increase of 53%.

Among them, Disney Media and Entertainment Distribution revenue reached US$14.11 billion, an increase of 11% year-on-year.

Disney's revenue in the third quarter of fiscal 2022

The streaming media segments in the media and entertainment business, including Disney+, Hulu and ESPN+, had a total loss of US$1.1 billion. The financial report said that this was mainly caused by rising content costs.

In addition, due to the impact of the epidemic, Disney postponed or canceled some projects to release in theaters in fiscal 2020 and fiscal 2021. There have also been significant disruptions in content production and availability, during which some important live sports programs were delayed.

Although Disney can release some movies in theaters this year overall, it also faces the challenges of some markets continuing to open restrictions on theaters and the attendance control.

Disney's film business has not attracted money as much as before. It is regarded as its most profitable movie series, Marvel Studios (Marvel Studios), although it has recently released more than a dozen new superhero movies and TV series, such superhero series has become increasingly aesthetically fatigued by the audience.

This summer, Thor: Thor: Love and Thunder, one of Marvel's most important side characters, had a box office of $144.2 million in the first weekend, surpassing market expectations.

However, by the second weekend, Thor 4's box office fell 68% to $46.6 million, tied with last year's " Black Widow" and became the Marvel superhero movie with the biggest box office drop in the second week.

"Thor: Love and Thunder" continued to decline over the weekend

Disney turned its attention to streaming business represented by Disney+, but this will inevitably affect the box office revenue of theaters.

and Disney+'s paid subscription revenue seems to be difficult to support revenue. An important change this quarter is that Disney+ will launch an advertising version.

As the financial report was released, Disney issued a statement saying it plans to launch an advertising version of Disney+ on December 8.

Perhaps behind the addition of advertising is a hidden price increase by Disney+. Because the monthly subscription price of the ad-free Disney+ will rise from the current $7.99 to $10.99, up 38%, exceeding the 11% increase when Netflix announced a round of price increases.

Disney has decided to further increase the exploration of the commercial value of streaming media. Except for Disney, the Disney streaming matrix has all increased subscription prices this year. Official news from

shows that starting from October 10 this year, the monthly fee for the ad-free version of Hulu will also rise from $12.99 to $14.99, and the monthly fee for the Hulu subscription service with ads will rise from $6.99 to $7.99.

In addition, from August 23, ESPN+'s monthly fee will rise from US$6.99 to US$9.99, and the annual fee will rise from US$69.99 to US$99.99, an increase of 42.86%, the highest among all platforms.

market analysis believes that now may be a good time for Disney to improve its bargaining power, because Disney still has greater room for growth in the international market, while Netflix is ​​facing a bottleneck period of new users.

Disney+ wants to add ads, but is still cautious. In May this year, Disney revealed that it will soon launch a low-priced Disney+ subscription service with ads, which may limit the advertising duration to 4 minutes per hour, less than the advertising duration in similar services of competitors.

2, add advertisements, will inevitably face short videos such as TikTok and

, add advertisements, can streaming media platforms be supported? Business models like

have been proven to be difficult to run in the Chinese local market where streaming media is more developed. Platforms such as iQiyi and Tencent Video , which are comparable to Disney+ subscription members, both suffered a sharp drop in the first half of this year. Streaming media platforms that mainly focus on long videos rely more on brand advertising, because only the revenue scale of a single brand advertising can cover the cost and cycle of high-quality content production.

However, one big problem facing brand advertising is that it is extremely affected by seasonal factors and program schedules.

Disney also showed in its financial report that overall, in the U.S. domestic market, advertising revenue was higher in the fall and lower in the summer.

For example, the advertising revenue generated by sports programs that are more popular in the North American market will be affected by the schedule of sports seasons and events. The arrangements of these events throughout the year are different, and they also have periodic impacts. Some competitions are twice a year, while others are once every four years.

There is another situation, which is the uncertainty of schedule for large events like the Oscars.

Disney disclosed that revenue from broadcast advertising fell this quarter because American Academy of Film Arts and Sciences changed the award time for the Oscar ceremony, thus reducing the average ratings of the show, and the average ratings of the show are declining.

This year's Oscars were aired in the second quarter of this fiscal year, and the previous fiscal year was aired in the third quarter, which caused revenue differences. External factors such as

will cause differences in advertising revenue of streaming media platforms in each quarter, and will be fed back in financial statements. To some extent, this may not necessarily reflect the commercialization level of streaming media platforms in a specific time.

But what we have to realize is that behind this may be an embarrassing situation for companies like Disney that rely on copyrighted content to convert brand advertising revenue - when advertising revenue depends heavily on program schedule and performance, more and more advertisers will turn their attention to short video platforms such as TikTok, Reels, and YouTube Shorts where UGC creators gather.

There, a large number of users around the world continue to contribute content to the platform for free, and there are always unexpected and eye-catching new things that happen, which make people immerse and constantly addicted.

In contrast, the stories created by directors and screenwriters behind closed doors are not as exciting as the bloody hot events in life that are more exciting to our eyes?

What's more, the information flow performance advertising that these platforms are based on will see more direct commercial conversions than brand advertising.

This has caused the current reality that more and more funds are flowing to information flow platforms that focus on short content, and it is even more difficult to attract top quality talents to join without strong financial support.

This is an unfortunate for high-quality content creators, and it will eventually become a sadness for viewers who have requirements for content aesthetics.

always says that "the production of Netflix must be a high-quality product". Netflix, which focuses on paid subscriptions for content, has been losing users in the past two quarters this year. Perhaps this phenomenon is the feedback on commercial performance.

and Disney has also lowered its target for future subscription users.

They expect core Disney+ subscribers to reach 135 million to 165 million by the end of fiscal 2024, and subscribers from Hotstar may increase by another 80 million. In other words, Disney+'s overall user scale was adjusted to 215 million to 245 million, lower than the overall target of 230 million to 260 million subscribers previously given. Benjamin Swinburne, an analyst at

Morgan Stanley (Morgan Stanley), also believes that Bob Chapek must currently convince investors and fans that his film works will be exciting and profitable, and will arrange a group of top talents to participate in the production.

3, theme park performance is outstanding, and it has surpassed the pre-epidemic

This quarter, Disney's revenue and operating profit exceeded the expectations of Wall Street , mainly due to Disney's performance in theme parks in the United States, and its profits have even exceeded the pre-epidemic level.

Disney’s Parks, Experiences and Products division (Disney Parks, Experiences and Products) hit record highs.

financial report shows that due to the gradual recovery of international tourism, character meetings, drama performances and night activities have returned to the theme park, and the number of people entering the park, accommodation rate and cruise ship sailing rate have increased.

This brought sales of the sector to US$7.4 billion, a 70% increase over the same period last year; profit was US$2.2 billion, also higher than US$356 million in the same period last year.

includes Disneyland, Walt Disney World, and four resorts in Europe and Asia, and has always been Disney's most profitable sector.

This is also the sector that the current Disney CEO O Bob Chapek (Bob Chapek) was previously responsible for. He joined Disney in 1993 and has served as chairman of Disney's theme parks, consumption and products since 2018.

In February 2020, Bob Chapek took office as CEO. He was competing with him for the position of CEO but failed. Later, he joined TikTok, a subsidiary of ByteDance, and became its first CEO, Kevin Mayer.

The current source of revenue for Disney's parks, experiences and products sectors is mainly the sales of theme park tickets, the sales of food, beverages and merchandise in theme parks and resorts, hotel room night fees, cruise vacation sales, vacation properties sales and rentals, royalties for authorized intellectual property use of consumer goods, and the sales of branded goods.

In addition, the revenue comes from sponsoring co-brands, real estate rental and sales, as well as royalties for Tokyo Disney Resort , etc.

In the third quarter of fiscal year 2022, Disney's revenue sources and performance of the parks, experiences and products sectors, and their performance,

From a geographical perspective, Disney's domestic revenue from the United States was US$5.423 billion, a year-on-year increase of 104.18%; revenue from international parks and experiences was US$788 million, a year-on-year increase of only 50%; while consumer product revenue was US$1.183 billion, a year-on-year increase of 70%.

At the time of the worst epidemic, theme parks and resorts were forced to close, and cruise ships and other tourism were suspended. This segment business is the largest part of Disney's business with the decline in performance.As the epidemic gradually stabilizes, this part of the business has become its most eye-catching business performance.

This is also similar to the revenue performance of some offline entertainment segments in China.

Previously, a live performance industry insider told Titanium Media APP that although the epidemic has affected business hours, cross-city travel and international travel have been restricted due to the impact of epidemic prevention and control. In fact, the domestic performance market, including the livehouse music scene of young people who love each other, has ushered in an unprecedented wave of development, and revenue has hit historical highs.

However, the revenue of the park sector has surged, and Disney's view may be that international tourism, which has been interrupted due to the impact of the epidemic, has been restored.

But in fact, in the first quarter of this year, Disney theme parks and experience departments had record revenue and operating profits in the United States, and the best performers belong to the local market. At the same time, on the performance call, management also spoke out that the cruise ship business with higher profit margins and international tourists have not yet fully recovered.

4, "Exit the Quote" can support the future of the paradise?

In addition to factors such as the epidemic, Disney believes in its financial report that the commercial success of the theme park this quarter, the new booking system and the new Genie+ application are of great contribution.

This service is built into the Disneyland app. Visitors can use the program's services to avoid long queues in theme parks, and Disney also believes it can manage labor costs more efficiently and carry out promotions.

In October last year, two local Disney resorts in the United States, Walt Disney World Resort and Disneyland Resort, launched a new itinerary planning service, Disney Genie, replacing the previous FastPass virtual queue for quick clearance.

Previously, Disney tourists could use three different virtual fast passes, FastPass, FastPass+ or MaxPass, to reduce waiting time, experience their favorite amusement facilities, and avoid the long queues that ruin the interest in having fun.

Visitors can choose the facilities and activities they are interested in on Disney Genie

At present, Disney Genie mainly provides three services:

, Genie: a free itinerary planning tool when purchasing tickets. As long as you choose the attractions, facilities, and restaurants you want to go to, Genie will assist tourists in formulating exclusive customized itineraries.

, Genie+: A single-day payment service is provided to assist tourists to book popular facilities and attractions in the park in advance.

3. Individual Lightning Lane: For facilities, a single-pass payment system, tourists can be arranged to quit queues, and priority is given to taking the longest waiting time and best-selling facilities in the park. It is also a Genie+ service.

free digital service Disney Genie, similar to a day plan, allows visitors to schedule a personalized itinerary to ensure visitors can see all available experience activities, and use the app to book restaurants, order and purchase items, etc. The paid Genie+ has different projects and different prices in each park.

In the domestic market of the United States, there are 46 Genie+ facilities in Orlando Disney World to make quick clearance options, the cost is $15 per person per day; while at Disney, California, there are 19 Genie+ facilities to make quick clearance options, the cost is $20 per person per day.

In addition, Disney has developed additional features such as audio experience activities and AR lenses for Genie+.

Another payment mechanism, Individual Lightning Lane (a single-pass payment system fast customs clearance service), serves popular projects in the park. These projects are mainly Star Wars: Rise of the Resistance, Remy's Ratatouille Adventure, and WEB SLINGERS: A Spider-Man Adventure. Among the two "money-added" services of

, Disney officials are obviously more optimistic about Genie+. Perhaps the Individual Lightning Lane is not as good as Genie+ in commercial exploration space.After all, there are not many most popular service projects in the same park, otherwise it will be hard to call it a popular one.

and Individual Lightning Lane also stipulate that the same facilities can only be purchased once on the same day, and two separate paid facilities are limited to purchase every day. There are 8 single-pass paid facilities in Orlando Disney , and 3 in CA Disney.

Paradise has performed well, boosting Disney's morale and stock price this season. However, even though Bob Chapek, who comes from the paradise business, tries to seize more monetizable value from the paradise user base, the most difficult problem for him is probably how to maintain the growth trend of paradise population and its advantages in the expectation of the US economic recession. The market also generally believes that under the current inflationary pressure, households will give priority to reducing spending in entertainment categories.

(This article was first published in Titanium Media APP, author | Li Chengcheng)