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DIS Walt Disney Co (The)

Participants
Lowell Singer SVP, IR
Robert Iger Chairman and CEO
Christine McCarthy Senior EVP and CFO
Michael Nathanson MoffettNathanson
Jessica Reif Ehrlich Bank of America Securities
Ben Swinburne Morgan Stanley
Alexia Quadrani JPMorgan
John Hodulik UBS
Doug Mitchelson Credit Suisse
Todd Juenger Sanford Bernstein
Steven Cahall Wells Fargo
David Miller Imperial Capital
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Walt Disney Company's Fiscal First Quarter 2020 Financial Results Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mr. Lowell Singer, Senior Vice President of Investor Relations. Thank you. sir. ahead, go Please

Lowell Singer

welcome call. Walt and quarter Company's XXXX earnings to afternoon Disney The first Good

release issued press on Our was our is ago website available and at www.disney.com/investors. about XX minutes

webcast also webcast be is on website. our transcript call Today's available and the will and being also a

Executive President for are, and Officer. Chief Chief me Christine McCarthy, Disney's Chairman Bob Financial Joining and Iger, Senior today's and call Officer Executive Vice

will of questions. Following course happy comments Christine, from your Bob to we and take be

call the over Bob So with turn that me started. get to let to

Robert Iger

Thanks good afternoon Low, everyone. and

work We've to thousands affected had Certainly in who Coronavirus. will monitor me closed Hong about Asia I prevention comments. developing this by people the a productive to will line great efforts in we've of with the quarter have and including those parks continue place In the let the talk our Kong in devastating a her outbreak very numerous impact hearts quarter, region. begin start temporarily crisis. across events to financial before with go Christine Shanghai the public year. out the and But, health China, we our related us taking all in about details to the and this for closely

The call, of since the global became surpassing XXXX. quarter, nine record Frozen which more of and the billion saga, Wars: since which Box Sky studio $X.X Turning the $X time, to Walker X Frozen, held the than more Walker, sales, concluded our animated our Rise that Sky in highest-grossing was episode all global two original Star billion the movie Office. exceeded last which films released each the at

contributed Toy the along Skywalker Lion to and year a Marvel, Box X for of global Endgame all these the Many us films Frozen for biggest and exclusively Rise Story Captain on Office more time, set service their The with previous Avengers: Disney remainder window. of of total $XX Disney record than The following are X billion Aladdin, movie the XXXX. the Plus billion, of available industry in entertainment join $X.X and of home by shattering the soon already will King,

On the Wars: opened by in in thrilled which response in attraction of early we're few Rise parks the Anaheim, to our Resistance, Star December, weeks Orlando newest a the side, ago. just and overwhelming

and Our to Disney Design most for Imagineers ambitious Lucasfilm and advanced the of at technologically an it's levels. elevating it's the job phenomenal exciting did and absolutely and one ever Team storytelling attractions new immersive, created Park,

a both quickly become and Not surprising, Galaxy's parks Rise at Edge and favorite a Disney has at the Resistance Disneyland has fan of Walt been great World. success

content high engines outstanding the of exceeding course, Disney the Plus point our successful the the of Disney portfolio expectations. highly our our Thanks of greatest in technology incredible been the and anticipated great has streaming even of brands, large quarter robust a part was service our to enormously Of launch creative platform, Plus. from launch

million plus free up which to to of paid of then, we previously, have of service, the and we XX.X the quarter day directly through year offers than disneyplus.com had for Disney a million ended X cost. reported subscribers. at by Disney continued we for many sign-ups As Verizon, Plus additional the end at sign with XX more no its Since customers consumers

lot Sony distributors other in through you and to there's We as additional some interest we wanted well this new Google, Samsung, including of Apple, give business context. a As recognize LG, and Roku. Microsoft,

of at Monday, we as paid pleased I'm were to XX.X say subscribers. million So, that

pay reporting both Plus, on. rates on One we to and pleased we specifics, forward, of that not free is were sign-ups our that intention will Going to end Disney we note that subs, to for announce better expected. report the quarter as provide it's are of churn although the additional than conversion we're from

the include quality of the We variety to-date reaction Disney Plus believe brands and user reflects factors of interface, of to uniqueness our a and and the the high overall service content. subscriber the that growth and excellent

are in well. our reflected four-quadrant In the numbers appeal of seeing our we fact, brands as subscriber

quite On consumers studio Suite and have the Moana like of exceptional Disney the content XX recent Frozen. service popular and seasons Cody, side The shorts like available. The previous on available is classic the and theatrical with & became Hannah from enthusiastically releases Montana on movies offering Zack series our Simpsons January embraced The including which Channel all Lion XX. Life King, of also

interest bonafide of hit The subscribers, of quickly slate a and which great growing original is our especially cultural has content Mandalorian our And phenomenon. to a also become

Of course, and our Mandalorian, company's who ability didn't a by has sensational Disney I in mention response I'd this The says about be new do world remiss the character connect so believe Plus child certain to audiences. taken the much if with storm. I to

coming in Baby featuring the December. Episode We in will We'll to in of series and which Disney the Marvel service Wandavision, premiere for Many products high the The Winter Loki, Yoda includes saw know for original August market debut probably and our Skywalker. Plus. you will The the consumer Falcon there to of Soldier, three hitting Super Rise X, Bowl add which spot quality on the great Frozen and new content service of X, is substantial continue months. array the anticipation that

events actors integrate all the Marvel Marvel platforms, and characters from future into these will these banner. same the shows Marvel storytelling Studios cinematic as Films factor under universe These from new across we along with

multiple Disney, new We also Geo. Lucasfilm Marvel, of the The Nat and have anticipated from October return highly Pixar, in Mandalorian series and

to lot forward look to. a there's So

providing volume Although build not brands, to franchises we quantity, we content as on continue will from and just quality portfolio. remain focused our our increase, our core

when U.K. notice France, have we XX Switzerland Plus' March roster Disney Spain, And in and Ireland, the in starting The as Plus Austria. Western markets, Europe numerous launch priority Germany, big Italy, has of will interest the is next creative taken community joining in Disney extraordinary expressed many in international on talent. well, launching and

currently pay-TV Nordics several Belgium, Additional in provider including follow deal we other this markets the throughout potential Canal summer. Portugal France. December, will In partners the distribution talks the with in leading Plus, region. signed We're a with and

We're that Plus Hotstar launching will XX, in we on through the Disney Indian the March be to our of League beginning season. at also service announce India excited Premier Cricket

to to Hotstar. We world. VIP fastest-growing in our of to the Premium the Plus and will economies be existing the platform rebranding as Disney Disney a of see Hotstar Plus in proven great use countries subscription service Hotstar this new and tiers the one launch We populous most opportunity

the of pleased quarter UFC with subscribers. the about million. We've been the of portfolio a especially million million number We brought growth were of in recent and partnerships, with particularly across fight X Ceron ended X.X at of paid McGregor Looking happy ESPN our with plus. we're X.X Direct-to-Consumer million new businesses, and pay-per-view X.X as subscribers, also a with we and a the Monday, purchases

We to continue will basis. on add opportunistic content service the an to

announced the about will XX.X to million. base, order At optimistic Hulu business number U.S. paid Direct-to-Consumer as and Hulu, million into integrat presence of to ended quarter as subs the we well future with look it closely subscriber and consumer more With more as the was respect our we reorganizing the the of XX.X remain recently to Monday, outside numbers, our service. we be we the effectively efficiently expand in to domestic that our as operate segment

all in-season earnings for FX announced exclusive which all the well last subscribers available our cost. next programming. new Hulu, on be at back Hulu on as the will also for streaming will During series. current as we to offer service streaming additional most and seasons Original library FX call, launch Hulu Beginning Hulu will be no of month, FX

expose to exceptional is in to and audience, streaming are viewers FX We new that the include content TV while includes also broader available engaged this linear Hulu's reach to our there tremendous highly of to those a view ways. appetite of young FX a not making who opportunity as goal and and audience. fantastic consumers expand believe We our for content on subscribers, pay is as many Hulu to

a developed programming pivot established as increased the step creative a of engines. strategic for high continued new is strategy, for existing It's models, navigating have be made we we to in extraordinary in been produced since our quality The of will direction and and all progress. addition programing announced but Hulu, direction challenging which FX investment particularly in between emerging our when an shift of our it involves amount business company a to intention by

believe better in We we've reorganization our & segment. strategic businesses would position future that reorganization for structure creating Plus, now than that are a the more the International included Disney This launched confident and completed new a Company, the and Direct-to-Consumer ever decision. of our

and media believe not the are of thrive of in proud enormously technology a short well relatively period time forces accomplished environment. positioned we only I have am today's of in now what withstand increasingly dynamic disruptive but to we

call I that, our talk will to questions. more about be to with take performance the back I'll and quarter, And to then in the turn Christine your over

Christine McCarthy

Bob, afternoon Thanks good and everyone.

as Fiscal start, positive results, per a we the received from good for our discussed, Disney the incredibly Plus have off continuing to-date. response is affecting share launch and are items certain were comparability, quarter quarter of operations with earnings Bob XXXX Excluding first consumer by $X.XX. first we as to pleased the evidenced and

outstanding momentum of our first performance. Studios terms our creative fiscal In deliver quarter results, continues to financial

the worldwide compared our theatrical to in X reflect Disney at to were third year, higher TV content performance last Rise Higher compared sales decrease significantly up theatrical the by was Frozen of Returns film partially sales by and Internet, and Star income the offset Plus, TVs SVOD and SVOD quarter The QX last SkyWalker Poppins Wars: year, Nutcracker. The legacy Breaks of results growth to in included driven to studio. by which actual results a driven parties. distribution Mary Ralph releases The Operating and results legacy

from loss an and SVOD legacy partially more TV $XX our The in the studio TV theatrical and at at Theatrical, XXCF offset as Worldwide business, million income and by general a distribution was increases by than loss were operating administrative operating offset SVOD businesses costs.

driven Products, by partially at up Products and Parks, international the At and at at and was in quarter, domestic and Parks operating results Resorts. Experiences offset our Resorts, our higher Consumer income results by Parks X% lower

merchandise, quarter, XX% and by Experiences of merchandise from the quarter. in theatrical a operating our lesser as domestic higher growth Wars impressive to benefited growth and Resorts. Revenue in in up in at attendance both spending of increases which income an strong sales to revenue and from extent Frozen result Star was Products guest Parks up of XX% releases due and domestic licensing Consumer was at a the driven Parks

wages higher X% Experiences significant of at flow as expenses dampened due by was growth Parks as revenue associated bargaining labor result the income strong Edge a and Operating expense agreements. was growth from domestic to and operational Galaxy's up through with collective

domestic at beverage and per at Per X% was X%, was the was Attendance up quarter in food up XX% first on our spending. admissions, occupancy room our spending and Parks and spending guest capita hotels and domestic was up XX%. merchandise higher

last So time up our rates far up this X% compared currently are year, reservations hotels this resort and to are pacing book domestic XX%. pacing quarter domestic at

our offset Disneyland as than Hong the more At results decline attendance at are improved quarter. outlook in International the $XX Kong were about with results QX consistent lower Shanghai last occupancy. we quarter operating lower income hotel Disneyland at due of Operations, by Hong was to Kong communicated a million in Disney and Resort

situation to our the in and recent and due negatively Kong, closure impact results. will the second year of However, virus both parks ongoing quarter Corona Shanghai full Hong

The the is of the quarter resume we magnitude Chinese closures New and the to during normal in is duration which due we and The taking quickly Year impact how of attendance highly can timing the see typically holiday. precise place operations. levels dependent the on strong of financial closure current occupancy the

Disney an the is the Shanghai QX. for approximately operating currently adverse impact quarter park second have $XXX closure we of to estimate At two million, assuming closed Resort, income could of the during park months

quarter. second an estimate income of have additional $XX impact park for about the Hong closure the Disneyland, At to could we Kong operating million adverse of the currently

As seeing China, other from a Kong in Hong last we were already Disneyland visitation to quarter, significant I discussed of Asia. decrease parts and

income So two closed two quarter. these in million factors Operating for the the a for about second decline resort of Disneyland's aggregate, this $XXX we assumes result could Again, in months. in estimate is Kong Hong

of launch at lower was and rate ESPN, increases ad consolidation by Media growth due by at than Networks, higher cable Cable offset of NFL, in ACC Higher primarily the income by quarter contractual production both driven affiliate decrease and the XXCF first results revenue addition the was businesses, programming in more cable to to up the Turning to reflect offset football Broadcasting. ESPN. a increases college Operating At revenue. at in and costs, Network partially the

revenue domestic regular-season lower average viewership more the in was offset linear night for and to in NBA due college football increase advertising viewership ESPN's first X.X% down quarter an football. from which Monday primarily than games,

ESPN ad note, year. was and ESPN's On quarter comparable to when across revenue revenue in ad platforms, our reported addressable DTCI advertising domestic that revenue the digital you ad total domestic all which roughly look segment, prior include in first the at

by results So guidance far quarter press release our new cash this are Broadcasting, lower operations. X% is were XXCF the quarter, XX-Q legacy consolidation compared and our the further accounting up ESPN's last year. to benefit from higher ad pacing filings, offset due and domestic from in to linear of sales explained a results At which partially in

legacy higher a our sales was difficult offset and Studios lower ad more Broadcasting lower ABC than programming revenue operations were production quarter comp in program costs. and affiliate higher the network as revenue, at by at Results

sales the prior advertising Network. and in and was and Punisher, Studios ABC lower reflects at a during Broadcasting year. program our revenue political ad XX% no year consolidation The XXCF Lower and growth lower stations year this Total Media comparable affiliate cable was of decline ABC first at sale the of quarter, Networks driven the quarter owned last revenue in reflect at and by the both the sale QX broadcasting. at Marvel's up Total

the of the revenue XXCF subscribers was to Network. points due by X ACC a growth the a about which affiliate higher was partially from benefit in decline rates, and of offset The from from by by increase acquisition launch X.X points XX in a X-point decrease of driven aided point

launch driven at losses higher the Operating consolidation loss to Direct-to-Consumer successful the Plus, the cost of of at operating incurred and Hulu, at segment our Disney International in by Plus. programing increased costs an quarter ESPN and support

change consolidation losses international million, line Direct-to-Consumer of guidance was our offset partially year-over-year Results adverse businesses quarter. the segment income on cable operating in by were impact we which $XXX operating the at provided These with last the had of an businesses. in the XXCF

will the about segment generate $XXX Direct-to-Consumer our DTC operating quarter second in launch we investment International specifically expect which expect We and in Plus, & to continued in for our million the services, losses Disney impact in late drive of to a consolidation income quarter, change DTC number of of on in second Hulu year-over-year million. the and approximately markets businesses our operating the European the of an adverse $XXX

of episodic XX.X anticipated As of the of quarter. Marvel growth with the including growth U.S., subscriber year Bob an of paid outside phase million primarily subscriber domestic expect million with content, as X.X first original come mentioned, subscribers release increase next the to this Disney later we yesterday, Mandalorian. the from meaningful coincide of highly the the Plus likely to X near-term, Season series calendar and from had since end of In The

and Studio revenue driven Media in inter-segment the QX, and content the primarily by to eliminations sales segment, were the elimination DTCI. to from profit higher Networks Turning significantly

that note content of quarter accounting additional this contains the XX-Q transactions segment results. general in various treatment and our I'll of structure on our types reflected the inter-segment detail

we continue Lastly, XXCF value realizing progress make the of acquisition. on to the

in Hulu's The netting operating contributed businesses total income income Consolidating million. operating in $XXX quarter. XXCF's excluding in eliminations, losses in resulted approximately million and the acquired, a of first net eliminations, impact of out about Hulu we segment segment inter-segment operating stake $XXX inter-segment and positive

operational per of had our we control dilutive XXst impact before acquisition EPS dilutive full share, full of taking the Fox will a Hulu on of purchase $X.XX estimate our earnings and accounting on accounting operational share. impact control impact and have the the total per XXCF, of of of the Hulu in estimate a before We impact purchase taking QX share $X.XX Century per of of acquisition about QX

XXXX. track We for to accretive fiscal acquisition accounting on EPS to are still for purchase the before be

to (multiple over would turn your take questions. Lowell, happy I'll be now call and the speakers) we to

Lowell Singer

ready Christine. question. first And the we Thanks, operator, are Okay. for

Operator

from Instructions] Michael MoffettNathanson. question [Operator Our first comes with Nathanson

now Your line open. is

Michael Nathanson

Plus. Thanks, few Bob. have Disney two in I

biggest you a reviewing - of the plans or we in bit, first stepping plans one that had your after we what at were after back learnings, then how or or what have content First learnings post-launch, accomplished, is looked did adjusted terms you you of and the those two months launch product? spending surprises this

Robert Iger

legacy the Well, across just if launched. array programming very that and the mentioned library about we musicals shows of you surprise, a brands. we've theatrical was, thing. a things know earlier not and it any really Disney broad about shorts I watch about, just not I original and didn't by know XX% about we the at Mandalorian, on or been learning people releases That product this not has that don't and heartened but broad-based, recent course, because of of the it's least all shorts, the this is basically other about Mandalorian, who Disney everything been by including older but until watch of led call Channel a certainly one and there so of XX it's it fact original our been library, service, and has But was consumption

XX% instance. for movies as have of a, use service who the watched people

of that that of with feel and and original long-form, the short-form brands of a those and the includes we films legacy in TV So then product obviously, validates blend library collection mind, programming. that and or

of or is it before terms the roughly the launched. The been was original would our in we service same trajectory investment as as on in programming have

that much. changed really haven't We that

with we when would launched Clearly, that worked that led of and it original that we decided the we by invest shows amount modest we in to the over launching build were knew a programming and original have time. Mandalorian

of we don't adjust that volume product that really we're look to have creating we now. -- to as ahead, that there are that with is much the really feel comfortable So we and right

for few we Marvel I seven a movies announced and a and are were that Star other Wars of series in stages development, series have and have are we coming. of of varying or stages Disney as originals, just we We there series original there Disney pre-production, production have three number have are the development think a instance, - that in varying Marvel

a, on Very Timmy know way. a XXX% I by coming, new Failure have as the them, a pleased is instance. with we Tomatoes Rotten one for

So think to feel I need all adjust, and blend made great we've quality real a a the the think volume got and to that is it thing with that working. go not just don't is a I we - best about decision and

So part the second the question? of

Operator

from comes America with Securities. Jessica question of Reif next Our Bank Ehrlich

Your line is now open.

Jessica Reif Ehrlich

on strategy here. ESPN timing well can back One – you before, question then and the said then long you've us some placement ESPN, on these Hulu, if an timing, it update - us get could on lights any you you the because you will Direct-to-Consumer, how your working that on give Bob, on to take - globe, of thoughts anything of alluded to NFL bundle more internationally, versus NFL, can give you of terms in to And thoughts going around NFL. is on can that obviously take ABC and but On you're you also Plus? it

Robert Iger

needs But We lot Disney around Plus. are priority a the we've of that plan We actually internationally. take to be working it. up specifics have Hulu to decided a

later come in We the going Europe XX in right soon of March, in then those it's creation we concentrate out and after to in as and into America, and that with in on Hulu on we going to across marketing Western call March Latin or need continue roll I multiple territories for feel India, are after including XXXX the launching, that. those across world and the product then the mentioned to on and launches,

- we look, very XXXX, after So do early is Plus except it's begin NFL we speculate. out, don't to to rolling Hulu launch. say that then have side, probably the in specifics, On plan Disney I'd internationally

these suggest you led creating NFL traditional while amount watching for disruption course really think of erosion, live up of new the of more I the sources well, basically competition is and see by fair for that, multiple held the a people there the linear and and The a there's ratings from NFL. networks. programs sports lot has

for been NFL and So preliminary be you only me any our and very give have detail. discussions strong to more interest the in remains more it nothing and there would premature

Operator

Our Swinburne Ben Stanley. next Morgan with question comes from

Your line is now open.

Ben Swinburne

is about in reported. the launch obviously, lot how brands and the you Can with of thinking U.S. we about discussion subscriber VIP? and And you're there's be the VIP? digest India all unique relative the as in can new Europe opportunity in market to think business? and of big where and in seen Disney's to popularity going market in you you the you launch, quarter you the a the it a India inside Hotstar the outside Bob, what position that's to we've the U.S. about going do go-to-market price these tell How given now Hotstar But plan Star you since markets we're versus the so a IP strategic relative far results in just talk just about March should the how U.S. bundle what us that with really

Robert Iger

Disney think of including probably they one you're markets. maybe of all consistent what I basis raised strengths for them, is affinity those have Brands global the selling interest markets, Wars, them, on world, each a They have one of varying in Brands, all point alluding which the a into first different is of across which Star are that Well, the brand strong strongest but in all Ben. and is things to brand us

local and meet enough high cases. the dubbed the relates it that been the the that, that So, do programming, adjusting make to sure, designed language we quality. has programs secondly, don't have either that I product except U.S. obviously, need to properly for And local think necessarily are in we to much to to quotas as simply address local local really well, are or

The in there One been about has of international Wars things after because The way the Rise caught certainly on. of - certain popularity Skywalker, and there's Star and Star markets where and interesting written some the things in international has the Wars never markets Wars that of Mandalorian, Star by

One people legacy is didn't on of up that many Star a that Wars that these there main that markets, being where or franchise brand. grow in China for the isn't a reasons one, of

So Mandalorian, when they they true obviously, to the even interest. not tuned terms already the Star and about Wars because too legacy, of or Mandalorian want to to of didn't in into, Skywalker board about is characters had in that or gone past was though don't heard really your based you point get an much anything in on was access elements, familiar certain the terms with Wars it's that on, places, them know there in not of late. That's have history Star

about we anyway, the never Disney feel the brands. popular. been great of Interesting brand popularity our So has more globally

interest seen seen or The among in young we've United affinity the particularly that the we've to nicely, Brand Plus people. actually studies the suggests that is thing has that research risen thanks to Disney want brand that I brand in say and States other Disney

do of relevance of the platform, lot manner presentation. a technology, the think I has that to the the of with

linear networks, et of about why cetera. which in loud younger particularly the I of statement cetera, is people, in et the than were some what's our peers think demographics the terms on demographics going world it's substantially consumer the in on a tastes, today Hulu of young

bundled price a Plus one the basic with In programming. Hotstar have launched this the giving IPL, will point, product. original launch as it's of India, at bundled library, programming the Hotstar India. that entire primary with the include We're Priced be not directly in period more premium Disney to library that at be products so meaning a will expect but specifics the market League. brought there'll peak very more that two the the and nature will we're time, Cricket the about other original be so and into going One will not and for

they we under includes we optimal opportune billing that advantage an of the subscribers to technology interface so, launch in take And use presence the the very think the take moment, the the we we tie-in, we exists sports of have, a advantage millions that market service, Star it's the and circumstances. believe, of of already that and very, and also

Operator

Our next question JPMorgan. comes with from Alexia Quadrani

Your now open. is line

Alexia Quadrani

on like the share meaning following with color commentary what on up there - Just any are, you your subscribers they Plus. terms us and where from of of like type the of Is Disney can sort subscriber or and like in came your more what year-long meaning a on maybe many versus I of and color wholesale use deal for month-to-month, many how in versus can there? know much came share sort sort multi-year subscriber how of or partnerships you Verizon such. don't how

especially you've kind your And Studios? the now question success just just where on - is account taking when of your conduct continue, then conviction from there of that studio, incredible Fox the my can second record you're had success and another pipeline year,'XX, I guess

Robert Iger

regarding did on enabled consumers while well, the packaging lower with existed in at Direct-to-Consumer the quarter Plus, market in a all, that in $X.XX was and to that ARPU ARPU was of by were that prices. higher extremely Package, We discounts that the and buy Disney $X.XX the of end First the suggests the the fact subscription basically there the and so or them only a weren't but where basically the or price. them for of three-year, subscribers lot XX.X came directly XX% year-long a have for others, full many instance, and service the even for bought million Disneyplus.com, full with those of a revenue of sharing the many through may - month we bought roughly not subscribers,

the rest variety of from including other About app, and services, came Verizon, iTunes and those the came stripping XX% from that the of the subscribers platform. is

pleased with the that us So people routes get extremely we pleased with basically, the took were diversity and actually ARPU. to very to of,

said I launched very which a the with lowering think the and that positive in Zealand, the New that earlier, terms was mostly bundle only understand came with that the And terms very ESPN it's very, domestic and Canada in couple also in all story majority we manner rates. domestic Now so, and But, of the Netherlands we Australia, - are Hulu the I territories, churn and because other was subs. of in vast that people and from this, with thing of the as bought this noted ARPU. helpful these

I the churn we well from better launched. better rates before be my would would as the estimated we much both And much we they expected said, in be had conversion than as than as free-to-pay, were they - remarks,

I starts terms product, interface brands the And the our the high the of that got use, to a the as the the and and ease think be possible accessible easy that's incredibly marks also which I end - again, - with of a of user the purposely the ignore, price desire product of basis. priced think, the on and very quality navigation, point, of broad result brand the can't the of as point we accessible because of price in value

look, Onward the for a have long-term the Disney but Pixar with the for the but titles, not of Regarding we and number to pleased I repeat name likely extremely instance, and the marketplace. titles studio studio, we as alone away, ahead, something studio Box right $XX slate. we're from plus in with our prospects Soul Office could this to look year a billion is we're year,

Disney strong We've got and Cruise Mulan. branded really couple of a Jungle

lot at We imagine, those. year initial have obviously can and at development Eternals of Black Widow, with of the of end rest of first, the the then a from you and the all Marvel - at

developing a features. Saga, were previous On had I the Wars a taking hiatus release, Star mentioned we're television and we - in calls, it as in we're finished theatrical terms of Skywalker both front, and nine-episode bit of the

X and also characters direction the The their taking coming it One infusing the characters The Mandalorian including in Wan in few in from with is of years have prequel to with next priority series. those Rogue possibility Season we in a then, in then own coming October, Obi an possibility The thereafter, more Mandalorian of development. in more terms And of series, television and the

that studio. soon after in that that. be same say continue secondary work strong operating a supplier talent Star Plus, us, Disney be, are market the for going and given as strong the of and be Plus great and we priority Hulu, very way. going as for XXXX for development as for product the income confident to to So of for the the have with, is the still going to to and both more Disney to on for television short-term a original call of the franchises XXXX But expect theatrical not we I'll but and it have the year, by is the also front, both for about a But we driver and we then is movie both studio working Wars will company, the

Operator

next question with John Our UBS. comes Hodulik from

Your line is open. now

John Hodulik

business. questions, on Bob, couple the DTC of follow-ups

content it Disney come this, model be the million in expect churn, all, about, be million talked in million spend, Plus, because we're target the the to profitability is seem ARPU up, number? definitely, the you than for goals, sooner XX of to on First to the we million XX seems XX halfway of to holding subs, hitting. to Can XX the in profitability, the model, metrics and

we TAM the focus terms that on gave the thought million you're market at U.S., the are What you you could world U.S., then again, and of of guys you million sort is think guidance. bigger just the in subs XX if case penetrating we or are you as just I than the to that - high-end around you And of TAM, of and - for seeing potentially the rest the in the just guidance thought? high-end, the in or then, are - XX be just

Robert Iger

when I that up XX for XX obviously that we've to to going two-thirds million was except million from to included you few launched actually United bring - of I you a related outside the John, touched markets on where subs yet. not the even we it just to the touched States, going think, U.S. were get

guidance, water launched early having more working. know those are a know it's because not in this in any So, What is product we under of any markets, way and those too pour big yet. cold that change far already international after, not on we about and markets, in brands our for the them, strong basically, our quarter us markets belt little a bit to the

in United in those interest in the talking general, it been The streaming, about States. markets, isn't has as as in high world. the I'm across

and of more we those say, to seeded markets I'd more streaming, done that challenge been we marketing markets, with in of effort already a extremely a So launch not probably those has have Netflix haven't know Internationally. well

or reached know, that the But after a take just you touched course, and the one over premature of whether statement five, just our quality since and guidance or we're or more suggest - predicted we don't total short number at just United be a would a in the have available period States I both, factors know of in number that price. think us number just the very the that we a about the to that that beginning I we did I think I'll the there, is we product would it's just we're is up. is of go them market that that and the I I've of do math It for upon, way What year time, time.

over are only space, competition, they CNBC product. we've felt like threatened in isn't extreme I make. of made any quality, of a there quality that and the very like franchises asked obviously ours, investments those made brands the coming Those by that unique product are continuing I our whether earlier It not the into product, more was on But years to is because that about we're competition we've - and competition there's the the is high

elegance created and tech we it. a a an priced. the service that extremely user working. well very basis, really about - basis we we're There's we're from feel it and and ease, to an great technical So And is interface differentiated,

at prudent to our point, as it's a and that this it at guidance, us long it have we but we ahead that say for look - way we at can't some believe - don't change adjust So we won't point, would and to that be I in go.

Operator

Our next question comes from Doug Mitchelson with Credit Suisse.

open. Your line now is

Doug Mitchelson

or terms thoughts week, around using on this can a period to in think them consumption service, starts or sign-up every Disney bunch people I stayed that or the is where it for patterns day couple they're initial the Bob, are service, then going any - fade levels and did am Plus things, after leave order that Disney of relatively of find congratulations sort Plus service to every you issues going far. of level? the success so a after is households service, I of on in keep consumption the the of A are - using but,

series And talked am launch India, with I lot first a interested, Bob, and about the but you in in it the broadly of markets. interested Europe about contrasting

any that in content those is the and service of we be? the the Europe the of is on in also, successful U.S., available that marketing in efforts of go-to-market, to you. same nuances we or differences as countries in should how of gauge So Europe, sort any content try available and aware sort might be distribution Thank

Robert Iger

people We people a high. recently, measured three how - frequency, of we've that's streamed the that engagement, it in think are is and subscriber, cases, measure people the I'll to users are those launch - which right stream week basis we extremely active don't which into very which all that on it per I have very, and high. a a hours number call should weekly it percentage essentially details - weekly recency, many how engagement, times measure since all in - are per get used people on except of is users, basis, say many of terms basically We we is weekly measured or now, active recency,

something both with of the is first basically, that average this quarter. The actually is number again service, true over that the frequency - days same thing and they the use we've seen

necessarily the relate can six quarter the also I week you at per or these numbers first high stream, think to the range, that hours seven XX, not that's since that's week we in a multiple looking and were high. very I to very give hours now, and very, December probably a subscriber. engagement, hours

the in a call that it across board, actually in Christmas off, high, but of when little a time quite Now have us. lot skewed I'll was we're it families sum, may to that there, interesting again and is consumption, were seeing bit

done a, on. come the including just very, Pixar big have very as in service. Toy came well. great shorts, Story recently instance, extremely their of has well, some that are titles musicals Obviously, interest on the for X doing

together Endgame. I came kind bragging, it like I we're of Skywalker sounding collecting of, anyway, library. in of those Lion and It's and think, without, the concept year. mentioned later the Rise guess, I brands King validates putting on, Avengers, in

to some - there quotas work to do is local because in the meet. to in an markets that of strong. in that be appeal we encumbrances But world, there certain terms cite is of anything relatively we product issue. say pretty of universal isn't shape As rest the - of product, look to that have really there. would We're the good are we of terms in have I'd this

to penetration. that, lower do markets, in there's You broadband have some factor in

the have is markets. total it available don't as as in so not And high other - market you the total available is

the Netherlands decided launch we was why very there. high. That's

But and that opportunities name where are huge will that's India lower us, Internationally, that high. the have one, of and being think, you obviously, very other Disney - huge resonate is broadband. Korea product, well. there opportunities I South for markets, nature that extremely family But

Operator

with Our Bernstein. next Juenger Sanford question comes from Todd

is now open. Your line

Todd Juenger

One as I quick Parks to little as and talk change break on Hulu, the about I'd could here. love of one for far then,

Hulu - the SVOD it's just price. list - ARPU, - non-advertising So number, Hulu that Hulu on to than $XX-plus even SVOD on us, stuck it's - the struck out higher

Hulu big would must you SVOD, going you what's understand. be a if could on be share to there with on anything helpful wondering just it advertising share ARPU number. And could the So

think domestic could of And when you comes Christine, the Parks, thinking on near-term from a percent the particularly and what about at visitation, virus couple U.S. for then you Parks, Asia, then you're travel remind a that and the if all, if effects of curtailments international bigger minor one. and really the of there? ones, and the attendance us, about from

guest It's all your parks. wondering for is it's question, pricing love think I get is growth about the you a you I investors and this food The investors with at if come we just in going, has the because hope what from We'd thoughts, how I'm income the question that either function and share you'll form spend not wrestle can of Longer we question or from much time right? term, look long of gee - increased so growth keep think per revenue Bob, important. merchandise how accept super just volumes.

sets Is or either gets and priced point just your which sort [indiscernible] competition there that in. - some or thing in at sets out consumer of

the for time? formal or the you how can there long guidance, Thanks. other on loved grow side more asking I without that, are ways can push over there opportunity parks is yield - just So still

Lowell Singer

Okay thanks, Todd.

Robert Iger

I Hulu do think we go first because we is ARPU? want to SVOD

Christine McCarthy

it SVOD ad-supported. Hulu Most $X.XX higher part strong. the at product of the is out equation, ARPU come the ad the the and priced the is ad-supported, makes of subscribe - free. but ARPU even ad-supported than very The to subscribers the

them other. stack good up to a each when of the that's balance So ARPUs you next

the Let international domestic on question park me take visitation.

be a We tick a U.S. some now disruption Brazil significant XX% have have range, below economies run We're Asia. would visitation. and that two at of would because the because of would cite, in I be had be general, anyone, a the that do Argentina. not range of for low-end of the The American visitation markets, amount those of XX% lower the from right have typically - guests outside the to parks to South In in won't the maybe surprise

When at we have Brazil, even I Disney market the and us, everyone to then Asian five, the is Coast, when Canada you surprise, UK, World. at a for of then just look markets Walt no Disney Walt one West which for top very that given East Disneyland, that. Vancouver. Argentina, is you And proximity market being strong the and the And the no into look Canada, Mexico think top knows World, factors Coast

the the we also single-digit even actually very Disneyland. for Mexico, then, low And Australia, would breaks into have and it's five number market and that a top Japan be only

from evidence been Coronavirus. on intent no to that or commitments there people And impact or so reservations the any far, there visit, is has fulfilling

Robert Iger

growth to be other for blend. regarding going really And possibilities the parks, a it's

just We've high. spending restaurants. capita capital projects. extremely invest been to Obviously, out new quite the continue has different per to but many new attendance terms well, that's not just hotels, We opened in of done Rise announced attractions, we and Resistance build of new

We variety have projects underway. different a of Marvel

The related things number Galaxy Avengers including E-ticket a attraction. and project of Marvel in in the a Florida, California, of Guardians

to We continue build to just out most out Company's I we're in And the popular, most build well. against going mentioned, we're opening Florida. the hotels one So, or as as popular franchises. Riviera using one opened Resort

a Star activity Wars lot a of coming, hotel themed there. have We

combination pricing slowed and passes sophisticated, We exceptional that things. has will there still far more thoughtful has story start to exist, virus expect been look other But the obviously, lot. and a we that a things a that for international we territories. a opportunities yield clearly, when more And but is as tell down that well. bit, in course, strategy They of looking will is lastly expansively that's helped of

at Taking more advantage pricing the others but for more also parks periods periods leverage of accessible making non-peak peak in accessible substantially prices. and

Operator

Our with Cahall Fargo. next Wells from comes question Steven

line is open. Your now

Steven Cahall

low keeping Disney market or with Plus. the first I Netflix on maybe you right, harder It seems on like for your keeping more Just of this make life of and expensive as customers. kind like could priced the that by can you but two you as some given ones exactly competition engagement quick response. think would long HBO streaming price

curious time it do of it you're of you sort keep the kind thinking go over how is? as just or up does price it Disney of about plus So long-term

just maybe then to more a and the of how think to studio us synergy know the Christine, on is got a transfer just color then, you've wondering Studios but could there. the impossible year, And theatrical pricing. little there you the parts give for with moving lot about is I if also Fox the predict,

Thanks. kind all how year we pieces? studio So, production about income given of this the different think the those of do

Robert Iger

we pricing We that focused really believed haven't a we we that Steve, it's pricing address very to now. a now and we ours more not except we’re opportunity would up at about original content, consumer, felt has strategy with launched as not relationship we the really since went added the are along conversation our still an to that right this. price-value right We're all. had but new on Yes price have of as worked. content, all price We priority

price from about very Christine, So, the would us be term, don't a want I take start increase about, to perspective. near you studio? for the anything question near talking it to expect think in premature the and term

Christine McCarthy

take me that. Yes let

an nothing mentioned - incredibly our truly year As six incredibly That comp global over $X on a already short year-over-year. that. our sorry hard is the in legacy about office. Disney seven movies, $X movies a hard box Bob billion, that's studio phenomenal seven over over had of an movies billion studio,

So, - successful believe we our year. very that still we studio be this still will will

we already have have in basis. out, good those. global And consumers really the confidence a about that on content mentioned coming their resonating Bob movies with and we feel some we of big

Pay on window in content, Pay transfer positive As studio benefit had that fiscal the X movies DTCI. will and X it impact out the quite also XXXX, content XXXX, into to the come that few fiscal of definitely will pricing a from The the relates a make windows will it studio. we in and to sales have

Operator

question final with Miller Imperial David our comes from Capital. And

open. now line is Your

David Miller

dozen is time, you market forward, you launch over long would doesn't accuse committed the Marcus. but extent I've times four time. you a a really some the never you is Bob, probably excuse despite window, AMC on to given years last as and Disney problem maybe going the the to say of theaters covered for Plus. you I me and disingenuous, that long and know you and know, And lows for that, Cinemark I've problem that being theatrical The are XX-week XXX% that the that guys I've covered heard the believe of a

your willing your in theatrical market have theatrical window I kind of that regard? call, say say, much. window would commitment to you overall would given so leadership So Thanks to be the or on to recommit forward going this what about to the you should

Robert Iger

adjust this is plans business. we The have it for for no company to theatrical and our window working

the comment movie how not of the those how only are on companies films I a reflection company. market, movie Your we're about are faring business companies their maybe the their positioning is other think, and

but Office, might lack Box or that of biggest company that not or be the - part it's any we not suspicion the suspect on our that we're are We to movie only and I the a conviction us not not either might telling we due be truth.

David Miller

Right.

Robert Iger

that the - not we're change for working plans But and us, requires. have to it's foreseeable it we no future in

Lowell Singer

the you, joining periods today. David, found measures that of certain to In the to Thank website. provided equivalent thanks our of be GAAP assets this everyone year. of estimates we can we reconciliation measures Note referred remarks our of that in performance Investor on us non-GAAP a on and call prior Relations for XXCF

acquisition. historical results before measures the analysis nonetheless unaudited of are based are records, estimates but of are These and estimates on an not precise these

Let certain statements constitute may me on Securities also estimates call, remind forward-looking you, this Laws. financial the statements under including

do statements basis and the not make events we on we the these and to We any undertake statements. obligation and update views of time future regarding our performance these at them, make business assumptions

factors, uncertainties, XX-K, in including and Exchange and our with other our subject risks may Securities quarterly expressed in and are number contained or reports statements results in the from XX-Q results Form light variety Forward-looking to the Report materially factors a Form of on - and Annual of implied differ a filings on of Commission. actual

Have us. joining rest good of for the a again Thanks day.

Operator

for Ladies Thank call. you participating. and gentlemen, this concludes today's conference

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