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Disney set to slash content spend in 2024, D2C results improve in Q4

Disney yesterday revealed plans to slash content spending to around US$25bn in 2024, down from US$27bn this year amid a strike-related downturn, as the Mouse House continues to look for cost savings across the breadth of its business.

Bob Iger

In February, Disney said it expected its overall content spend to be in the “low US$30bn range,” but the dual strikes in the US meant that its annual content spend was around US$27bn in 2023, it disclosed in its fourth-quarter earnings yesterday.

That number is set to drop to around US$25bn in 2024 – despite the fact next year won’t be disrupted by strikes in the US – as Disney continues to streamline spending and pursue a path to profitability in its streaming business.

Disney’s interim chief financial officer Kevin Lansberry said that around 40% of Disney’s annual content spend is on sports content and rights, meaning around US$10bn would go towards that while the remaining US$15bn will be spent on entertainment content.

The decrease in content spending comes as Disney increases its cost reduction target to US$7.5bn, from US$5.5bn. Within that, Disney said it had increased its content-related savings target to US$4.5bn after previously pegging the number at US$3bn. In addition, Disney said it has made around 8,000 job cuts this year, higher than the initial target of 7,000.

Disney revealed the content spending plan as it announced improved streaming results, with its core Disney+ service adding almost seven million subscribers in the fourth quarter to reach 112.6 million globally.

The subscriber increase was fuelled by 6.4 million sign-ups outside of North America, while in the US and Canada the service added around 500,000 paid subs. In India, Disney+ Hotstar continued to lose subscribers, around four million this quarter, for a total of 37.6 million. In the US, Hulu subs grew by 200,000 to 48.5 million.

Across its entire direct-to-consumer (D2C) business, which includes Disney+, Hulu, ESPN+ and Disney+ Hotstar, revenue grew 12% to US$5.05bn in the fourth quarter, compared to the same period last year. At the same time, its D2C losses narrowed substantially to US$387m, compared with US$1.47bn a year ago.

Two million of the new Disney+ subscribers joined the ad-supported tier, which has 5.2 million subs in total.

Meanwhile, linear networks revenue declined by 9% to US$2.63bn in the quarter, although operating income in that segment remained flat at US$805m.

Across the entire company, revenue was up 5% to US$21.2bn in the fourth quarter.

Elsewhere, the media giant confirmed that it would begin the process of integrating Disney+ and Hulu into a one-app experience in the US in December. Initially, it will be in beta form, with a full launch planned for March 2024.

CEO Bob Iger was asked about whether Disney would follow companies such as Warner Bros Discovery and begin licensing some of its key titles to Netflix. The Disney chief responded that it is “in discussion with [them] now about some opportunities,” but played down the notion that some of its biggest intellectual properties would be licensed to Netflix.

“I wouldn’t expect we’ll license our core brands to them. Those are real competitive advantages for us, and differentiators. Disney, Pixar, Marvel, Star Wars are all doing very well on our platform.

“I don’t see why, basically just to chase bucks, we should do that, when they are really really important building blocks to the current and future of our streaming business.”


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