Disney CEO Bob Chapek Is “Filled With Optimism” About 2023, Despite Potential Recession Impact

The last few years have been unusual for The Walt Disney Company, as they have been for many companies worldwide. As Disney continues to work on recovery from the COVID-19 pandemic closures, it has also been navigating the growth of Disney+ and other streaming platforms along with the launch of a new cruise ship and many changes to the Disney parks.

Cinderella Castle

In the last couple of years, we’ve seen changes like the new Park Pass Reservation system, the start of Disney World’s 50th anniversary, the transition to Genie+ (from FastPass+), and many price increases in the Disney parks. So what is Disney hoping to do in 2023? Their recent earnings call provides some answers.

Significant Reports from Disney’s Fourth Quarter in 2022

In Disney’s most recent earnings call, the company reported an increase in revenue in its Disney Parks, Experiences, and Products division. The fourth quarter yielded a revenue of $7.4 billion, which is an increase of 26% over the same time in 2021.

Main Street

Disney CFO Christine McCarthy noted that guest per capita spending in the parks has also increased by 40% since 2019. She attributed this change to the popularity of “premium offerings” like Disney Genie+ and Individual Lightning Lanes.

Expedition Everest Lightning Lane

Disney reported a total revenue of $21.3 billion for this quarter, which number is slightly below the third-quarter number but still up from this time last year. Although Disney reported financial losses in the streaming section of the company, Disney+ added over 12 million subscribers internationally this quarter.

See more details about Disney’s Q4 2022 here.

So what’s next for Disney?

Disney’s Plans for 2023

Disney CEO Bob Chapek is “filled with optimism that this iconic company’s best days still lie ahead,” according to the recent earnings report. CFO McCarthy said, “We currently expect the total company income in Fiscal Year 2023 and segment operating income to both grow at a high single percentage rate vs 2022.”

Bob Chapek

Some of the growth may come from Disney’s 100th anniversary, which kicks off on January 27th, 2023, in Disneyland Resort. There will be celebrations and events at all of the Disney parks worldwide.

100 Years of Wonder

There will also be other significant changes in the parks, such as the opening of the new TRON: Lightcycle Run roller coaster in Disney World and the opening of Mickey & Minnie’s Runaway Railway in Disneyland.

TRON construction

But much of Disney’s optimism for 2023 comes from Disney+ and other media platforms, such as theatrical releases. Let’s dive deeper into those plans.

Disney+ and Other Streaming Platforms

2023 won’t quite see Disney+ achieve profitability, according to Chapek. He said, “We expect Disney+ to achieve profitability in 2024, with losses starting to decline in the first quarter of 2023.”

©Disney || Bob Chapek

The new ad-supported tier of Disney+ will launch in December 2022, and McCarthy noted that this change will begin to impact streaming profitability in late 2023. Chapek is optimistic about the advertising demand for Disney+ and reported that there are over 100 advertisers lined up for the domestic launch of the new tier.

©Disney

Disney also expects that core Disney+ subscribers will continue to grow, especially in the second quarter of 2023. This growth could be driven by new releases coming to the platform. Disney confirmed that “all theatrical titles will make their way” to Disney+ or other Disney-owned streaming platforms (like Hulu).

Disney+ Billboard

Disney executives expressed confidence in upcoming titles, such as Marvel movies like Guardians of the Galaxy Volume 3. Chapek also highlighted the live-action version of The Little Mermaid, which he said he “couldn’t be more excited” for. The live-action movie based on Disney’s popular Haunted Mansion ride will also come out next year.

©Disney

More new titles like a Pixar original and a 5th Indiana Jones movie could add to subscriber growth.

Chapek noted that Disney+ originally launched at a “tremendous value,” and he said that Disney has room to continue to explore price value for the streaming service. That could mean that we’ll see even more price increases for Disney+, Hulu, and ESPN+ moving forward.

Learn about the upcoming Disney+ price increase here.

Possibility of a Recession

Disney acknowledged that 2023 could bring a less stable economy, as many experts have predicted an upcoming recession. Disney executives noted that they “have to keep the health of the consumer in mind when we think about achieving all of our goals this year.” 

Crowds in EPCOT

However, some “profitability drivers” are independent of the economic atmosphere, such as a steady stream of new content and a focus on bundled offerings for streaming.

Disney+ Day

Other parts of the company — such as the parks — may be impacted by a recession. Disney said they are actively evaluating costs and forming a plan for this situation. McCarthy noted that discounts may be a good tool for keeping demand for the parks high, but she also cautioned that Disney “won’t use [discounts] to the extent [they] used during the last recession.”

Christine McCarthy ©The Walt Disney Company

McCarthy also listed the Park Pass Reservation system as a good tool to measure demand and manage attendance. She said that Disney can “be very flexible” with adjusting those reservations. Disney may also explore “more flexibility” in the Annual Passholder program, although McCarthy didn’t give any details about what that may look like.

Click here to see 5 reasons you might see an EMPTY Disney World in 2023.

Check out these posts for more info about developments in the Walt Disney Company:

Want to hear more of the latest news from Disney? Keep following DFB!

Join the DFB Newsletter to get all the breaking news right in your inbox! Click here to Subscribe!

The post Disney CEO Bob Chapek Is “Filled With Optimism” About 2023, Despite Potential Recession Impact first appeared on the disney food blog.

source https://www.disneyfoodblog.com/2022/11/08/disney-ceo-bob-chapek-is-filled-with-optimism-about-2023-despite-potential-recession-impact/

Leave a Comment

Your email address will not be published.