As it Reaches 100 Years Old, is Disney Showing Signs of Age?

A 100th birthday is always cause for celebration, no matter the circumstances. Very few American companies reach the century mark, and when they do it’s usually because they’ve managed to provide a service or product that American consumers have taken to their hearts as indispensable.

• As Disney turns 100, many shareholders view the company’s position as the worst it’s ever been.
• The company’s linear channels are in decline and may could be sold in the next few years.
• Disney hasn’t had a box-office hit in years, despite valuable franchises and in the face of success by rivals like NBCUniversal.

Happy Birthday?

Walt and Roy Disney first founded Walt Disney Studios on Oct. 16, 1923. In the 100 years since, the company has grown into much more than just a movie studio, incorporating an expansive array of theme parks that dot the globe and a merchandising operation that still has few global rivals.

But in 2023, the company’s struggles are impossible to ignore. Disney’s stock price has dipped nearly $15 per share in the past six months, and investors are saying that the company is in the worst shape it’s been in recent memory. A big part of those losses has been generated by a lack of positive results from Disney’s streaming platforms Disney+ and Hulu.

In fact, Disney+ has suffered three straight quarters of subscriber losses. Most of these losses have come from India, here Disney+ no longer holds the streaming rights to Indian Premier League cricket. However, those losses have not been offset by any appreciable subscriber gains in the United States or other territories, and the company still loses millions of dollars per quarter from its streaming segment.

Disney still manages to turn a profit, but its movie studio hasn’t turned out a viable hit in years. Competitors like NBCUniversal have not been idle; that studio managed to bring in over $1 billion at the global box office with its “Super Mario Bros. Movie” this year; in 2019 Disney had seven movies cross the $1 billion mark in global receipts, but so far in 2023 none have reached that financial benchmark. Movies like “Elemental” and “Indiana Jones and the Dial of Destiny” have been notable theatrical misfires for the Mouse House this year.

The company is seeing some of its biggest properties suffering major franchise fatigue, as well. “Guardians of the Galaxy Vol. 3” has been its only successful Marvel Cinematic Universe release thus far in 2023, and Marvel shows are already being pared back on to refocus on quality over quantity. The company has also completely retooled its Star Wars schedule over the past year, and while there are theatrical Star Wars releases on the calendar currently, nothing is slated to hit theaters until at least 2026.

Is a Rebound Coming?

Disney may be stuck in the doldrums now, but there is reason for optimism at the company. For one thing, Disney will soon be able to say it owns Hulu outright. At the moment, Disney only controls 67% of that streaming service, and the other 33% is held by Comcast. The two are currently in negotiations regarding how much Disney will have to pay for that outstanding stake, and once it gains control, it can follow through with plans to merge Disney+ and Hulu into a “one-app experience.”

Once Disney+ and Hulu are incorporated into the same app, it may help Disney reduce its streaming costs thanks to the synergies created. At the very least, the move will reduce friction for users who want to watch Disney-owned content without having to switch between apps to see it.

The other big reason for optimism at Disney is the direct-to-consumer ESPN streaming platform that the company is working to build. Such a service has been on the minds of sports fans for years, and Disney is reportedly looking to partner with digital and mobile companies to ensure the distribution of that service is as wide as possible. Having access to the full lineup of programming on ESPN without needing a cable subscription will be a (pun intended) game-changer for sports fans everywhere if Disney can pull it off.

That’s a big “if” however, and may require the company to part with some of its most well-known brands, including ABC. Disney has already held some exploratory conversations regarding the sale of ABC, and entities like Allen Media Group are eagerly awaiting the moment when Disney is officially ready to move on from its linear channels.

The pivot to streaming was never going to be clean or easy for a legacy media company like Disney. One hundred years of history is a hard legacy to live up to, and CEO Bob Iger has to navigate challenges in an evolving media landscape that no chairman has had to face before. Things are ugly at Disney, and there’s no way around it, but there are reasons for optimism surrounding the company and its streaming services, as well.