Disney recently participated in a question-and-answer session at the Bank of America Virtual 2020 Media, Communications, & Entertainment Conference.
Check out what Christine McCarthy — Senior Executive Vice President and Chief Financial Officer of The Walt Disney Company — had to say about the future of various sectors of the Walt Disney Company.
McCarthy noted that COVID-19 has really “thrown a wrench” into a lot of Disney’s business, but that it has also made it clear that flexibility is key to success.
Let’s see what McCarthy had to say about specific areas of Disney’s businesses:
McCarthy specified that Disney’s cruising business will likely be the LAST of Disney’s businesses to resume.
She said this is due to the nature of cruising and because the booking period for cruises tends to be longer. We’ve seen this with Disney Cruise Line continuing to slowly push back scheduled departures over the past few months. Currently, Disney Cruise Line has suspended departures through early December.
In terms of the new ships being built, McCarthy noted that the shipyard Disney utilizes for its cruise ships — Meyer Werft — “was impacted [by COVID] and…encountered a delay.” She said, “We’re in negotiations and discussions with the shipyard to finalize dates.” For the fifth ship, the Disney Wish, she noted they would make an announcement when they know the date it will now be completed, but it IS delayed from the originally anticipated completion by January 2022.
Direct to Consumer Entertainment
McCarthy said that Disney’s overall priorities for the next 3-5 years have not really changed, except that there will be an even stronger emphasis on direct to consumer entertainment. McCarthy noted that Disney has had to adjust what they intended to do on Disney+. Some of those changes included releasing films on Disney+ earlier than their original release dates and moving theatrical releases to Disney+. They also introduced a Premier Access option (meaning it’ll cost you extra $$) as a way to allow consumers to view theatrical released on the streaming service, like the newly-released Mulan.
According to McCarthy, Disney will continue to make adjustments as needed. She said they had a lot of projects that were set to be put into production that have been slowed because of COVID-19. She noted there would have been a lot more original content on the streaming service now if they hadn’t had to shut down production due to COVID-19. She said Disney will continue to invest in original content for Disney+ going forward.
Also, according to McCarthy, Disney+ was priced at a very acceptable price point initially. She said she believes that there is pricing power there in terms of potential price increases in the future, but that it will come into play more when they have more original content on the service. Changes in pricing will be adjusted depending on market dynamics.
McCarthy noted that, according to some of the data they’ve looked at, about 40% of people say they’ll go into a theatre to watch a movie right now, but she said she doesn’t believe the number is the same for older individuals or people with children, which may impact the demographic Disney is targeting with some of their family-friendly films. She said Disney will look at its movie releases on an individual basis to determine whether theatrical releases, hybrid releases, or other options are best. But she said they do have “a pretty robust release slate” scheduled in terms of movies for this year.
In the sports arena, she said the return of live sports has been embraced. We’ve seen sports like basketball, soccer, baseball, and football return. This is important for the Walt Disney Company because they not only have helped facilitate the return of both the MLS and NBA seasons AT Walt Disney World, but they also own the ESPN network.
McCarthy said “there’s a lot of good sports that people are watching,” and she noted that the NFL is also an extremely important partner for Disney.
McCarthy noted that Disney is investing in and will continue to invest in its theme parks.
McCarthy noted that when COVID-19 cases spiked in July, it impacted travel from other states to Walt Disney World, and caused Disney to shift and open things up more to Annual Passholders and local visitors. She said they continue to adjust the business as things continue to change.
McCarthy said that investment spent on the parks will be prioritized to continue certain projects that were already “in flight.” McCarthy specifically listed the following projects: the immersive hotel experience at the Star Wars: Galactic Starcruiser in Disney World…
…and the construction of the West Coast Mickey & Minnie’s Runaway Railway over in Disneyland’s Toontown. Mickey & Minnie’s Runaway Railway’s opening date in Disneyland has been delayed to 2023.
Other projects, like the EPCOT transformation, were not specifically identified by McCarthy as those that are being prioritized, but we have seen construction progressing for certain aspects of projects like Guardians of the Galaxy: Cosmic Rewind and Remy’s Ratatouille Adventure. We’ve also seen construction continue for the new TRON attraction in Magic Kingdom.
Other projects in EPCOT, however, have been postponed indefinitely, like the Mary Poppins attraction and Spaceship Earth refurbishment.
We’ll keep checking for more updates from Disney and let you know what we find!
The Walt Disney Company has had to make changes and adapt to the new world we live in. They’re taking steps to advance projects in various aspects of the company that they are feasibly able to do so, like Disney+ and certain projects in the theme parks. They’re also delaying other arms of the company when necessary, like the resumption of cruising and new projects with Disney Cruise Line. Check back for any updates as we learn them on other updates out of the Walt Disney Company.
Click here to read about the Disney Villains character cavalcade that will be coming to Magic Kingdom!
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What Disney parks project are you most excited for? Let us know in the comments!