iWorld
Disney emerges profit during first financial report in streaming business
Mumbai: Disney’s revenue for the quarter ending March 30 climbed to $22.1 billion compared to $21.8 billion in the corresponding period last year. Earnings per share for the quarter surged to $1.21 from 93 cents, exceeding analysts’ expectations of $1.02 per share on revenue of $20.53 billion.
The company celebrated its first-ever profit in the streaming business, with expectations set for the combined streaming businesses to be profitable by the fiscal fourth quarter, in line with guidance established in 2019.
The number of core Disney+ subscribers reached 117.6 million, while Hulu reported 50.2 million subscribers. However, paid subscribers for Disney+ Hotstar dropped to 36 million by 30 March 2024, from 38.3 million on 30 December 2023, with average monthly revenue per paid subscriber decreasing to $0.70 from $1.28 due to lower advertising revenue.
According to Q2 FY24 report, a 17 per cent decrease in operating loss at Star India was noted due to reduced programming and production costs attributed to the non-renewal of Board of Control for Cricket in India rights. However, this was partially offset by increased costs for Indian Premier League matches due to more matches aired compared to the previous year.
Disney+ Hotstar has been experiencing a decline in subscribers, losing 12.5 million paid subscribers in the third quarter ending on 1 July 2023, and an additional 2.8 million in November 2023.
The sports unit, ESPN, saw a two per cent revenue increase to $4.3 billion, while the experiences division, which includes theme parks and consumer products, reported a 10 per cent increase to $8.4 billion. However, there was a 17 per cent decline in sports revenue from Star Sports, reaching $105 million in Q2FY24 versus $127 million in Q2FY23.
The Walt Disney Company CEO Robert A.Iger expressed satisfaction with the strong performance in Q2, highlighting a 30 per cent increase in adjusted EPS(1) compared to the prior year. He said the positive outcomes of the growth initiatives set in motion the previous year, including highly anticipated theatrical releases, successful television shows, ESPN’s continued success, and strategic investments driving growth in the Experiences business.
iWorld
Snapchat parent Snap cuts 16 per cent of workforce in AI-driven restructuring
The Snapchat parent is axing around 1,000 jobs and closing 300 open roles to save $500m, as artificial intelligence makes smaller teams the new normal
CALIFORNIA: Snap is snapping. The Snapchat parent has confirmed plans to cut around 1,000 employees, roughly 16 per cent of its full-time workforce, as it bets that artificial intelligence can do what headcount once required. Shares jumped more than 10 per cent in premarket trading on the news, a brisk vote of confidence from a market that has watched the stock shed about 31 per cent this year.
The restructuring, which also closes more than 300 open roles, follows pressure from activist investor Irenic Capital Management, which holds an economic interest of about 2.5 per cent in the company and has been loudly pushing Snap to tighten its portfolio and lift performance. The firm got what it asked for, and then some.
Chief executive Evan Spiegel told employees the cuts would reduce annualised expenses by more than $500m by the second half of the year. The company expects to incur charges of between $95m and $130m related to the layoffs, mostly severance, with the bulk landing in the second quarter. Staff in Snap’s North America team were asked to work from home on the day of the announcement.
The financial backdrop is not without bright spots. Snap expects first-quarter revenue to rise around 12 per cent to approximately $1.53 billion, broadly in line with analyst estimates. Adjusted core profit for the January to March quarter is forecast at about $233m, comfortably ahead of Wall Street’s expectation of $186.8m.
The harder question surrounds Specs, Snap’s augmented reality smart glasses subsidiary, which Irenic has urged the company to spin off or shut down entirely. The unit has absorbed more than $3.5 billion in investment and burns through approximately $500m in cash annually. Snap is pressing ahead regardless, with a consumer product expected later this year, even as Meta leads the market in the segment.
Spiegel is betting that leaner teams, smarter machines and a consumer AR play can restore Snap’s credibility with investors who have run out of patience. The redundancy notices have gone out. The harder restructuring, the one that requires a hit product rather than a headcount reduction, is still very much pending.
