With the launch of its namesake entertainment streaming service just over three months away, Walt Disney Co. Chairman and CEO Bob Iger said Disney+ will be available in a bundle with the company's existing direct-to-consumer offerings.
Disney+ will be available along with Hulu LLC and ESPN+ for a total of $12.99 per month, the executive said, and marketing for Disney+ will begin shortly.
That price is equal to the retail cost for standard service offered by streaming leader Netflix Inc. and represents about $5 monthly savings from the price of the three individual Disney services: $5.99 for Hulu's basic plan, $4.99 for ESPN+ and $6.99 per month for Disney+.
An international rollout of Disney+ could proceed quickly, with a couple of markets coming online "around the same time" as the domestic debut, Iger said. From there, Disney+ would roll into other markets over the next two to three years, offering the same content from Marvel, Pixar, Disney, National Geographic and the Star Wars franchise that will be available domestically. Some international markets will also include local content to meet quotas applied to streaming services.
Marketing for Disney+ is set to begin this month across traditional and digital outlets, with Iger reviewing a comprehensive marketing plan in the coming days.
"It's going to be treated as the most important product that the company has launched," Iger said.
Members of D23, the company's fan club, will have the earliest opportunity to subscribe to the new service.
Turning to Hulu's international prospects, Iger said Disney is assessing various markets, but he did not identify them or specify launch dates. Disney consolidated a majority stake in Hulu through its March acquisition of 21st Century Fox Inc. assets.
During the third fiscal quarter ended June 29, the company's direct-to-consumer and international segment registered a more than fourfold rise in revenues to $3.86 billion from $827.0 million, but its operating loss widened to $553.0 million. CFO Christine McCarthy said the company expects that segment to sustain a $900 million operating loss in its fourth fiscal quarter, a jump of about $560 million from the prior-year period.
Corporate-wide June quarter revenue grew 33.0% year over year to $20.25 billion, up from $15.23 billion.
Media network revenues advanced 21.3% to $6.71 billion, from $5.53 billion in the prior-year period, with operating income ahead 7.5% to $2.14 billion.
The cable networks tallied a 23.9% jump in revenues to $4.46 billion, with operating income up 14.7% to $1.64 billion, owing to the acquisition of the 21st Century Fox businesses, notably FX Network (US) and National Geographic Channel (US), and an increase at ESPN (US), partially offset by a decrease at Freeform (US), which saw higher programming and production costs.
The broadcasting segment delivered a 16% increase in revenues to $224 billion, but operating profits narrowed 16.8% to $307.0 million, partly due to decreases in ABC Studios program sales and ABC (US) network ad revenue, partially offset by a decrease in programming costs and higher affiliate revenue.
The parks, experiences and products unit saw revenues rise 7.1% to $6.58 billion as operating profits grew 3.6% to $1.72 billion, driven by increases at the consumer products businesses and Disneyland Paris, countered by a decrease at U.S. parks and resorts.
Studio entertainment revenues soared 33.3% to $3.84 billion behind a strong theatrical slate, leading to a 12.9% advance in operating profits to $792 million. The higher theatrical distribution reflected the performance of "Avengers: Endgame," "Aladdin," "Captain Marvel" and "Toy Story 4" in the quarter.
Net income attributable to the media conglomerate came to $1.76 billion, or 97 cents per share, a decline from $2.92 billion, or $1.95 per share, in the year-ago quarter. Excluding certain special items impacting comparability, Disney said its EPS for the fiscal third quarter dropped 28% year over year to $1.35, down from $1.87.
The S&P Global Market Intelligence consensus EPS estimate for the just-ended quarter was $1.74 on a normalized basis and $1.45 on a GAAP basis.