By D. Maan, Jadetimes News
Disney's "Inside Out 2" Boosts Profits Amid Challenges in Theme Parks
Disney has seen its cash brimming as the massively exiting *Inside Out 2* is becoming an all-time blockbuster sequel, but all is not well for the entertainment giant as its business rests on shaky grounds elsewhere. The Pixar sequel has become the highest grossing animated film of all time, contributing substantially to Disney's recent financial turnaround.
Disney has recorded a pre-tax profit for the three months to June. While revenue has been driven significantly by revenues, in the main, the real star picture for Disney's performance this year was that its streaming business garnered a profit for the first time by Disney a huge difference in the tug of power in its financial landscape and proof that the potential with streaming could be realized.
Although these wins were good for Disney overall, the story was not as sweet, especially for its resorts division. The resort division was deemed by analysts as underperforming, and the company's revenues critically depended on it. The company had weaker visitation than expected. Lower-than-anticipated consumer spending was also reported within the parks. The underperformance is also being partly attributed to the fact that the Paris Olympics are still on. Disneyland Paris witnessed the increase in the number of visitors who have a bearing on the international tourist inflow into local spending and therefore the resort division. More broadly, there has been a decline in consumer spending more generally, which has also affected Disney's park revenues.
The picture in the US parks is troubling for Disney: its says it expects the year's second half will see 'lower demand levels overall'. And these 'dismal' results could 'stir fears of a US slowdown', Ben Barringer, an analyst from Quilter Cheviot, said in response to what has 'added to the cocktail of nerves that has seen stock markets wobble around the world.'.
Disney also has to contend with this shift in audience behaviour. That is, decline in their TV viewership and attendance at the cinemas. Its earlier approach was a reduction of password sharing to use screen subscription, yet the viability of this is still to be established.
And now Disney CEO Bob Iger, who had come out of retirement and delayed his planned retirement date to steer the company through its present challenges, faced further woes. Barringer suggested that Disney was still in the "turnaround mode" ahead, and it might be interested in hunkering down for what seems to be rough times ahead for the next couple of months. Conditions ranging from the country's economic downturn to its temporary depreciation from the Olympics will factor into the company's general challenges.
Silver lining: A bit more positively, a little optimism has crept back with Disney's recent success at the box office. Moreover, the release of the Marvel crossover film, featuring Deadpool and Wolverine, did turn everything around quickly. The film had a stellar opening weekend in the USA, taking its place as the eighth biggest opening ever and, in fact, so far this year. This, coupled with *Inside Out 2* breaking records, inflamed hopes of a Disney turnaround.
Highlights of the performance had been unveiled by Moffett Nathanson media analyst Robert Fishman, like the cash register of millions from *Inside Out 2* and the huge opening for the R-Rated Marvel film. The real test, however, has just begun, he pointed out: Disney needs to hold on to that large audience base with its upcoming movies, *Moana 2* and *Mufasa: The Lion King*.
Further, there was a robust performance in Disney's streaming business in the US and Canada but a 6% decline in India compared to a year ago. These mixed performances underscore continued to struggle on Disney's part to not only balance this wide assortment of entertainment enterprises but also to thrive amid overwhelming challenges.
As Disney continues to adapt and respond to changing market conditions, the future of this company could also be told in its ability to build upon successful properties such as *Inside Out 2* and continue to stay on top within a market environment that is changing rapidly.
