The Walt Disney Company reported Q1 fiscal year 2021 earnings today. Comparing first quarter 2021 vs. 2020, revenues decreased 22% to $16.25 billion from $20.88 billion in the prior year’s quarter.
Q1 fiscal year 2021, which ended January 2, 2021, was impacted by COVID-19. This was felt most acutely at the Disney Parks, Experiences and Products segment. Those parks and resorts have been closed or operating at “significantly reduced capacity” since late Q2 fiscal 2020. Also, their cruise ship sailings have been suspended.
For the parks that eventually opened, there was increased costs incurred to implement employees and guest safety measures.
Disney says the total impact from COVID-19 in the current quarter at the Disney Parks, Experiences and Products segment was estimated to be a detriment of about $2.6 billion of loss revenue.
The company also was negatively impacted by disruptions in television and film divisions. Their “key live sports programming” was cancelled or shifted. Theatrical releases and stage play performances also cancelled.
What about live sports and impact of theater closures? Disney was able to offset higher sports programming costs with higher broadcast ad revenue. Pushing movie releases were offset by reductions in film cost amortization, marketing and distribution costs.
The Disney+ & ESPN+ Quarter
The Direct-to-Consumer division, including Disney+, saw revenues increase 73% to $3.5 billion.
The improvement at Disney+ was driven by an increase in subscribers, partially offset by higher programming and production cost amortization and increased marketing and technology costs. The increases in subscribers and costs reflected the ongoing expansion of Disney+ including launching in additional markets. The current quarter included three months of Disney+ operations whereas the prior year quarter included two months.
The quarter ending January 2, 2021 saw Disney+ paid subscribers totaling 94.9 million. Up from 26.5 million in the quarter ending December 28, 2019.
ESPN+ paid subs also surged to 12.1 million compared to 6.6 million in the quarter a year prior.
Hulu paid subs bumped up to 35.4 million compared to 27.2 million a year ago.
