DISNEY COMPANY REPORTS BREAKING QUARTERLY LOSSES

The Walt Disney Corporation, a long-term leader in the entertainment market, has summed up its results for the 2020 financial year. In a report released on Nov. 12, the company reported the losses of $ 2.832 billion.

This amount of losses has become a record for 40 years. Despite this, the company noted that even more negative results were expected against the backdrop of the COVID-19 pandemic. The situation was saved by streaming services that Disney is actively developing.

Amid the closure of entertainment businesses, including cinemas, theme parks and cruise ships, the company has lost about 52% of its potential revenue this year, which fell to $ 1.6 billion.

Even more significant was the decline in operating profit to $ 419 million - compared to last year, it fell by 61%.

The last quarter, which the corporation completed on October 3, brought a net loss of $ 710 million. The company completed the same quarter of last year with a profit of $ 777 million. The company has not had any quarterly losses since April 2001, and this year the company showed them already twice in a row.

However, the streaming service Disney + has significantly increased the number of paying subscribers. In a few months from August to October, their number grew from 60 million to 73.7 million users. Earlier, the company considered the possibility of increasing the number of users of the service to 60-90 million no earlier than in 2024.

Experts note that a significant part of the users are subscribers from India, where the revenue per user is several times less than in the developed countries of Europe and the USA.

However, such a growth, unexpected for investors, was assessed positively and the share quotes went up.

Disney refused to pay dividends for the past six months, explaining the decision by the consequences of the crisis and plans to develop streaming broadcasting at an accelerated pace, requiring significant investments. In the future, management of the world's largest entertainment corporation hopes to start paying dividends again. According to experts, Disney has a chance to become the first Internet company paying dividends to its shareholders.

The industry experts of the streaming market note that Netflix remains Disney's main competitor.

According to analysts, Netflix will be the leader in terms of subscribers, while Disney will be ahead of the volume of content to monetize in the long term.