The Walt Disney Company cheekily filed its latest regulatory 10K statement to the Security & Exchange Commission after the market had closed on November 25th and when many analysts and observers were travelling to family and friends for Thanksgiving.
The filing date was wholly allowable, but reported was some worrying bad news: Some of Disney’s most important channels had lost significant subscriber numbers. For example, ESPN, perhaps the Crown Jewel in the Disney portfolio, has lost some 7 million US subscribers over the past two years (down from 99 million in 2013, to 95 million last year and just 92 million as reported on November 25th.
The problem doesn’t stop with Sports. The Disney Channel has lost 4 million US subs over the past two years, down to 95 million (and the same for Disney XD) while its ABC Family channel is down 5 million. Lifetime (94 million), History (95 million) and A&E (94 million) are all down.
ABC Family is about to be re-named and branded as “Freeform” in January.
On the positive side the international versions of Disney Jnr, Disney Channel itself and XD are all up in terms of subs numbers.
We will have to wait until November 27th for the market’s assessment of the situation, but while much of the ‘blame’ will be down to cord-cutting and perhaps the economic downturn, it is also wholly fair to say that Disney is well prepared for alternate viewing.
The company has plenty of content exposure and popularity via OTT services such as Hulu (where it owns one-third of the equity), 50 percent of ‘Fusion’, and a healthy portfolio of other distributors which are retailing its film and video content (including PPV and VOD services), as well as an ever-expanding international TV presence.