Disney is finding itself facing a financial stretch, and its new streaming service won’t be breaking even for three or four years.
Of the many entertainment companies suffering in the midst of the Coronavirus shutdown, Disney is finding itself particularly exposed financially. It makes much of is revenue from the likes of its theme parks, holidays and an assortment of businesses that require people to leave the house. Reports over the last week have suggested that the firm is losing some $30m a day during the lockdown, and it’s had to take extra credit lines to help get it through.
Not that Disney is under threat, just that it’s facing huge challenges.
In the midst of the reports about this has come the reveal that its Disney+ streaming service, that launched last year in the US and over here a few weeks ago, is still many years away from breaking even.
Over at The Motley Fool, it’s dug into things a little and revealed that Disney+ is not likely to break even until 2024 at the earliest. That the firm has invested billions just to get the service up and running, and with the required investment in new shows and movies, it’s going to take time to get it all into profit. As you’d expect. It has an aggressive target of 90 million subscribers, and whilst it’s off to a good start, the challenge will now be holding onto those it’s attracted already, whilst continuing to grow.
That said, the current situation is seeing Disney’s decision to press ahead with a streaming service of its own very much seen as the right one. That longer term, having a direct way to end users is likely to inoculate it slightly against other such shutdowns in the future. But it’s still bumpy times for a company that’s had a hugely successful last few years.
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