The global coronavirus pandemic has had far-reaching effects on different industries, including the film and entertainment industry. One of the biggest companies to be affected is Walt Disney Co., which expects a billion-dollar impact on their business.
According to The Hollywood Reporter, the second fiscal quarter saw the Walt Disney Co. experience a 63 percent drop in their earnings. By Disney’s own estimation, this translates to a $1.4 billion impact on their income. The lockdowns implemented all over the world have been especially hard on Disney’s Parks, Experiences, and Products, which is expected to get a $1 billion hit on their revenue.
It wasn’t just this particular segment that experienced a downturn. Advertising revenue for ESPN also dropped because the absence of live sporting events has resulted in lower viewership for the channel. The closure of theaters has also resulted in an eight percent drop for Disney’s studio group since movies like “Onward” had to bow out from theaters.
Even worse, all of this does not fully reflect the full impact the coronavirus will have on the company. As The Hollywood Reporter points out, that will be revealed once the financial reports for the current quarter are revealed. This is because it will then take into account the closed theme parks, docked cruise ships, and unreleased movies.
Business analysts like Lightshed Partners and MoffettNathanson have both downgraded Disney’s stock, following S&P Global’s downgrading of Disney’s credit rating a month before. S&P noted that even if lockdowns are lifted, it is unlikely that Disney’s theme parks will be operating at maximum capacity.
There are some bright spots, according to Variety. The publication points out that Disney’s revenue has risen to $18.01 billion, or 21 percent higher by year-on-year comparisons. It is also higher than the initial $17.68 billion analysts predicted the company would have in revenue.
Disney+ is another bright spot for the company. The lockdowns brought about by the global coronavirus pandemic has resulted in the service’s number of subscribers swelling to 50 million.
Disney chairman Bob Iger assured investors that the company would be able to weather the problems brought about by the global coronavirus pandemic, saying that the company’s family-friendly image and resilient nature would help it emerge from the current crisis.
When the crisis will end, however, is up for debate as COVID-19 infections around the world continue to rise. According to the World Health Organization’s May 6 situation report, there are now 3,588,773 confirmed COVID-19 cases worldwide, with 247,503 deaths recorded.
In the United States, the May 6 update from the Centers for Disease Control and Prevention puts the number of confirmed COVID-19 cases at 1,193,813. Deaths caused by COVID-19 are at 70,802 people.