Too Much TV: Your TV Talking Points For Wednesday, February 8th, 2023

Bob Iger promises to focus on being creative.

Here's everything you need to know about the world of television for Wednesday, February 8th, 2023.

DISNEY HAS A LESS THAN STELLAR STREAMING QUARTER
The Walt Disney Co. released its fiscal first-quarter earnings report on Wednesday, beating Wall Street expectations and overall revenue and earnings.

But the company's streaming business is both shedding subscribers and continuing to lose money. Although after the 4Q loss of $1.5 billion, Disney's streaming business lost $1 billion, an improvement over the previous company guidance of $1.3 billion.

Subscriber growth globally fell to 161.8 million, a drop of about one percent quarter-to-quarter. The biggest hit came in India and parts of Southeast Asia, where Disney+/Hotstar shed 3.8 million subscribers after it lost the rights to the popular Indian Premier League (IPL). That lost cricket rights also impacted Disney's international linear channel business, with revenues for the quarter dropping 21% to $1.2 billion and operating income falling 64% to $131 million.

Growth in North America was essentially flat quarter-over-quarter, with The United States and Canada adding a mere 200,000 subscribers in Q1, for a total of 46.6 million. 

Bob Iger's statement to shareholders was impressively vague and jargon-filled, even by the lax standards of an investors letter:

After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises. We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges and deliver value for our shareholders.

I mean, what executive would argue doing the opposite? "We're reshaping our company around a lack of imagination and we don't expect to see any substantial growth or increase in profitability."

Here are some other takeaways:

* Average revenue per subscriber, dropped to $5.95 (vs. $6.10), despite most of the subscriber losses coming in the lower ARPU APAC market.

* Disney says it will reduce its workforce by 7,000 employees, or 3.2% of its global headcount of about 220,000 as it works to save $5.5 billion in costs. Disney CFO Christine McCarthy told analysts that represented $2.5 billion in "non content costs" and an annualized reduction of $3 billion in non-sports content costs. That $3 billion is a staggering number, given that Ampere Analysis is estimating Disney was on track to spend around $10.5 in original content costs. There is some additional amount that will be spent on licensing, but that doesn't appear to be a substantial figure globally.

* Bob Iger also unveiled a new reorganized executive structure for the company, discarding the Disney Media and Entertainment Distribution group created by former CEO Bob Chapek in 2020. Disney will now have three core divisions. Disney Entertainment will include the film and TV assets, as well as Disney+ and will be led by Alan Bergman and Dana Walden; ESPN, which will include ESPN and ESPN+ and continuing tp be led by Jimmy Pitaro and Parks, Experiences and Products, which will include the theme parks and consumer products teams and will continue to be led by Josh D’Amaro.

* In the investor's call, Iger said Disney is not engaged in talks to spin off ESPN, and confirmed the company mulled prospect in his absence but concluded it was not a good idea.

THE LONG, DUMB RIDE OF DISCOVERY+
When the Wall Street Journal reported today that executives at Warner Bros. Discovery have apparently decided not to combine HBO Max and Discovery+ as planned, regular readers of this newsletter were probably not surprised. I've been writing for months about the challenges and difficulties swirling around the plan and today I posted a longer standalone piece about the decision on AllYourScreens:

But it quickly became apparent that there were a couple of problems with that strategy. Testing of the idea showed a great deal of resistance, especially from current Discovery+ subscribers. Results showed many of those subscribers either watched primarily programming from the Discovery networks or if they were looking for movies and other content, they were already a subscriber to a rival service such as Netflix. The idea of paying a monthly subscription fee two or nearly three times the current costs for the rest of HBO Max was a non-starter with a large number of people polled.

According to sources, Zaslav and other members of the executive team were not convinced of the subscriber reticence, attributing the reluctance to a misunderstanding of what they were trying to build. And in fact, several executives pointed to other studies which suggested that HBO Max and Discovery+ were underpriced in the market when compared to competitors. They pushed internally for a full price closer to $19.95, although heavily discounted for the first few months. 

ODDS AND SODS
* NBC will air Allen Media Group’s two-hour event special “Byron Allen Presents the Comedy and Music Superfest” on Saturday, Feb. 11.

* Paramount Global has restructured in Australia – including the operations of streaming service Paramount Plus and Network 10 – resulting in a number of "redundancies."

* Starz is rescuing Three Women, the Shailene Woodley-fronted drama that Showtime dropped following Chris McCarthy’s arrival at the network

WHAT'S NEW FOR WEDNESDAY:

A Million Little Things Season Five Premiere (ABC)
Bill Russell: Legend (Netflix)
Dogs In The Wild (PBS)
Kung Fu Spring Premiere (The CW)
Made From Scratch (Fuse)
Marvel Studios’ Assembled: The Making of Black Panther: Wakanda Forever (Disney+)
National Treasure: Edge Of History Season One Finale (Disney+)
NFL Tailgate Takedown Season One Finale (Food)
Not Dead Yet Series Premiere (ABC)
Santo Maldito (Hulu)
South Park Season Twenty-Eight Premiere (Comedy Central)
Super Bowl Greatest Commercials: Battle Of The Decades (CBS)
The Exchange (Netflix)
The Flash Spring Premiere (The CW)
Vanderpump Rules Season Premiere (Bravo)

Click Here to see the list of all of the upcoming premiere dates for the next few months.

SEE YOU THURSDAY!

If you have any feedback, send it along to Rick@AllYourScreens.com and follow me on Twitter @aysrick.