Coronavirus: Disney to focus on streaming after reporting huge losses

Disney to focus on streaming after huge losses due to coronavirus pandemic
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Disney plans to focus on its Disney+ streaming site and launch a new streaming service outside the US after it reported losses due to the coronavirus pandemic.

After it reported huge losses from the coronavirus pandemic as its theme parks remain closed, Disney said it will focus on its Disney+ streaming in the US and introduce a new streaming service outside the US to capitalize on its early streaming success.

According to the entertainment giant, its Disney+ service had already attracted 60.5 million subscribers.

Enormous losses

In the three months to June 27, Disney reported losses of $4.7 billion as it was forced to shut down its theme parks and delay film releases and production. In the same period last year, the company posted a profit of nearly $1.8 billion.

In late June, Disneyland was forced to postpone the reopening of its California-based theme parks as they wait for state guidelines on theme park reopening.

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“Given the time required for us to bring thousands of cast members back to work and restart our business, we have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials,” the company said in a statement.

Meanwhile, Disney has already resumed its operations in Shanghai and Hong Kong and plans to reopen its parks in Paris and Japan.

Christine McCarthy, the firm’s chief financial officer (CFO), said a $3 billion hit to its operating income was caused by the pandemic, mostly due to the disruption to its theme parks, where revenues fell by 85% compared to 2019.

Overall, Disney’s revenue fell by 42% compared with last year to $11.8 billion.

Placing its hope in streaming

In order to counter the disruption caused by the pandemic, Disney is pushing plans to expand its streaming service as it tries to position itself as a competitor of Netflix, Amazon and other streaming sites.

After launching its Disney+ streaming service in the US last November and expanding into other markets, Disney said it now has more than 100 million subscribers across its on-demand sites, including ESPN+, Hulu, and the Hotstar streaming service in India.

According to company executives, the new international service to be launched will be somewhat similar to Hulu but will build on the recognition of the Star name outside of the US.

It will feature content from the wider Disney umbrella, which includes ABC, 20th Century Films and SearchLight Pictures.

Chief executive officer (CEO) Bob Chapek said the company plans to release its new live action remake of Mulan on Disney+ in a $30 “premier access” deal in September.

The film was scheduled to open in theaters on March 27 in North America but Disney announced the delay in release in early March due to the coronavirus outbreak.

The company also announced that its other films, The New Mutants and Antlers, will also be delayed. They were set to hit the North American big screen on April 3 and April 17, respectively.

The film Mulan had a production cost of $200 million and is forecast to be a big hit globally, particularly in China.

It tells the story of Mulan, a legendary fighter from ancient China who poses as a man to take her elderly father’s place in the army and protect her country from invaders. The main protagonist was played by Yifei Liu.

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