Disney’s sales plunge $12 billion in three months as pandemic takes its toll


To try to get some of that revenue back, the company said it would finally release “Mulan,” the action-adventure reboot that has been delayed several times since its March opening.

But the company said it would employ a patchwork approach to do so. The live-action film will be made available on Disney Plus in the United States beginning September 4 – at a cost of $US29.99. The same pattern will follow in Canada, Australia and some of Western Europe. Customers will be given indefinite access to the film in exchange for the fee, but only as long as they subscribe to Disney Plus.

In countries where Disney Plus is not offered or cinemas are widely open, meanwhile, the movie will go to cinemas. This will almost certainly include China, where the film is expected to generate a large percentage of its box office.

In moving the film to a digital platform in the United States, Disney is acknowledging that COVID-19 surges make unlikely the quick resumption of normal business – a belief embraced by other studios, which have either substantially postponed their movies to 2021 or pursued a more circumscribed American release plan.

Disney has settled on a patchwork approach to release “Mulan”.Credit:Disney

The “Mulan” announcement also finally resolves what had been one of the great ambiguities of corona-era Hollywood.

Where many movies – including those from Disney – had either been postponed to the end of 2020 or moved quickly to digital, “Mulan” had remained in a kind of purgatory, postponed several times as the studio sought to bring it to cinemas around the world.

With the move, Disney has decided on a solution, if a hybrid one. It will bring out the film in theatres in some countries but not others, and it is taking it to a subscription streaming platform but still charging a supersized cinema price.

Disney’s $US11.78 billion in revenue in the quarter was lower than the $US12.37 billion many analysts expected, though earnings-per-share of 8 US cents was above the 64-US cent loss many forecast.

The company saw major revenue drops in several business units compared to 2019.

Theme parks plummet

Theme parks saw a plummet from $US6.58 billion to $US983 million, a plunge of 85 per cent. No American or European park was open in the quarter, while parks in Shanghai and Hong Kong reopened only midway during the period.

Equally concerning for Disney have been the few rays of theme-park light since the quarter ended. The company reopened Disney World in Florida last month to begin rebuilding its revenue pipeline. But chief financial officer Christine McCarthy acknowledged the move has not panned out as hoped.

“The upside we’re seeing is less than we originally expected given the surge of COVID-19 in Florida,” she told analysts.

Disney chief executive Bob Chapek said that the park has experienced a “higher-than-expected level of cancellations” as people decide not to travel to Orlando, Florida, because of the virus.

With COVID cases on the rise, cancellations have also been mounting at the Magic Kingdom at Walt Disney World in Florida.

With COVID cases on the rise, cancellations have also been mounting at the Magic Kingdom at Walt Disney World in Florida. Credit:AP

The company’s studio unit, which did not release any major new movies to cinemas, saw revenue drop from $US3.8 billion during the quarter last year to $US1.74 billion this year, a slide of 55 per cent .

Its TV unit, however, was able to hold the line, as revenue stayed mostly flat at $US6.6 billion compared to $US6.7 billion last year, with many advertisers already paid up through the quarter. Harsher effects could be felt in the months ahead with the lack of new shows and a slowdown in the ad-sales market.

One of the rare bright spots in the quarter was Disney Plus, the streaming service the company launched in November. Disney executives said on a conference call it now has 60.5 million subscribers worldwide after moving a number of previously theatrical movies to the service, most notably “Hamilton” on July 4 weekend. The service is growing faster than many analysts expected, reaching 54.5 million in May and adding six million subscribers since.

The direct-to-consumer division, of which Plus is a part, saw revenue tick up slightly, by 2 per cent, from $US3.88 billion in the same quarter in 2019 to $US3.97 billion in 2020.

Still, with investment costs high, the company does not expect profitability from Disney Plus for several more years, and the direct-to-consumer division saw a loss of $US706 million in the quarter, 26 per cent more than last year.

“Mulan” is one way that challenge might be remedied: a product financed by another division that could bring revenue to the startup service.

‘Different approaches’

Disney executives acknowledged how uncommon the tack was but called it a necessary exception at this moment.

The pandemic has “forced us to consider different approaches and look for new opportunities,” Chapek said in an analyst call.

The move, though, is unusual even in the streaming world, which has typically offered an all-you-can-eat plan to subscribers in which all new content is available under the monthly fee. According to the “Mulan” plan, however, a customer must subscribe to the service just for the right to pay for the movie.

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By placing the movie exclusively on the service instead of making it available through cable or satellite providers, the company is gambling that the benefit of the new Disney Plus subscribers it attracts will outweigh the lost revenue from people who are not subscribers.

It also is making a financial calculation: by putting the movie exclusively on its own platform, Disney is avoiding handing over as much as 20 per cent of sales revenue to cable operators, as studios typically do with distributors.

Later in the call, Chapek seemed poised to rule out the possibility this could be a trial balloon but then stopped short of that position.

“We’re looking at Mulan as a one-off as opposed to trying to say there’s some new business-windowing model,” he said. But then he added, “That said, we find it very interesting to take a new offering to consumers at a $US29.99 price point and learn from it.”

The company’s stock price has not dropped during the pandemic, as bargain-hunters and long-term investors have sent the price up more than 20 per cent since lockdowns began in mid-March. On Tuesday, investors, apparently reacting to the digital “Mulan” announcement, sent the share price up 4 per cent in after-hours trading.

Keys to a comeback

Both Chapek and executive chairman Bob Iger face significant headwinds in the months ahead. Any hope of a Disney comeback in the last six months of 2020 will turn on several factors related to the pandemic: Whether sports, particularly the NBA and Major League Baseball, can continue uninterrupted and bring much-needed revenue to ESPN; whether prime-time shows can begin shooting to ensure a reasonable start to the broadcast-network season in the northern hemisphere autumn; and whether enough cinemas can reopen in the United States and around the world to begin collecting box office revenue.

While Mulan will not be in US cinemas, Disney has high hopes for November, when it has Pixar’s “Soul” and Marvel’s “Black Widow” scheduled to open.

Disneyland will also need to reopen if the company wishes to restore its theme parks to its past glory; the park remains closed under California orders. The parks are key to Disney’s financial fortunes: with $US6.76 billion in operating income last fiscal year, the division was the most profitable of any unit besides television.

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Disney’s Bob Iger Gets Why Workers Want Bosses to Be Political


Bob Iger, the chairman and CEO of the Walt Disney Company, says that the country’s most influential businesses have a duty to effect social change and fill in the gaps of public policy. “I do think companies, particularly large companies, have an obligation to try to solve some of these problems on behalf of their employees and come up with solutions,” Iger said today in conversation with Laurene Powell Jobs at The Atlantic Festival in Washington, D.C. (Powell Jobs is the founder of the Emerson Collective, which is the majority owner of The Atlantic.)

Iger, who has considered running for president, said that as his employees’ trust in government wanes, they’ve turned to Disney to take action on social and political issues. “Because they feel that they’ve been failed by other entities, they’re expecting their company to step up,” he said. “Maybe rightfully so.”

Disney isn’t the only company to face this kind of pressure from its employees. As my colleague Ellen Cushing has written, workers at Microsoft, Salesforce, Google, and Amazon have all pressured their employers—in the past year alone—to reconsider government contracts that employees view as unethical.

Last year, Disney committed to paying for its U.S. hourly employees’ education, a benefit Iger said almost 9,000 workers had already cashed in on. “I don’t know of anything we’ve done that has resonated more than this,” he said. Also in 2018, Disney struck a deal with unions representing workers at its parks in Orlando, Florida, and Anaheim, California, to raise their minimum wage to $15 an hour by 2021, though its merger with 21st Century Fox earlier this year is expected to result in thousands of layoffs. Iger, meanwhile, was the third-best-paid CEO of a public company in 2018, making more than Apple’s Tim Cook and SoftBank’s Nikesh Arora.



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Disney’s ‘Mulan’ Under Fire for Filming in Chinese City Running Uyghur Concentration Camps


Disney’s live-action Mulan can’t seem to catch a break. Following coronavirus delays and a #BoycottMulan campaign, the movie is now generating blowback for its end credits in which the studio thanks an official Chinese government security bureau linked to Uyghur concentration camps.

Mulan’s end credits include a special thank-you to the Turpan Municipal Bureau of Public Security, according to a screenshot from the movie. The city of Turpan, which is located in the northwestern Xinjiang region, runs a concentration camp for Uyghur Muslims where detainees are forced to recite Communist Party propaganda, according to a 2018 investigation by The Wall Street Journal.

Some former inmates told the Journal that prison officials forced them to eat pork, which is forbidden under Islam, and to pledge allegiance to Xi Jinping. China has denied that it runs concentration camps, calling them a “vocational training centers.”

The U.S. State Department has estimated that China has imprisoned potentially “millions” of Uighurs and other Muslims.

Disney

Mulan‘s credits also acknowledge various official Turpan bureaus as well as Chinese Communist Party publicity offices.

The left-wing Washington Post ran an op-ed on Monday slamming Disney’s decision to shoot scenes in Xinjiang.

“Why did Disney need to work in Xinjiang? It didn’t. There are plenty of other regions in China, and countries around the world, that offer the starkly beautiful mountain scenery present in the film. But in doing so, Disney helps normalize a crime against humanity,” wrote columnist Isaac Stone Fish, a senior fellow at the Asia Society’s Center on U.S.-China Relations.

The human rights groups World Uyghur Congress has also highlighted Disney’s involvement in the city of Turpan.

Disney shot Mulan in China and New Zealand with an international cast and crew. The movie, which reportedly cost $200 million, recently opened in cinemas in China. In the U.S., Disney has skipped cinemas and released the movie on its Disney+ streaming service due to the coronavirus pandemic.

Mulan is facing boycott calls from pro-democracy activists in Hong Kong after star Liu Yifei expressed support for Communist China’s crackdown on demonstrators. “Because Disney kowtows to Beijing, and because Liu Yifei openly and proudly endorses police brutality in Hong Kong, I urge everyone who believes in human rights to #BoycottMulan,” activist Joshua Wong tweeted last week.

The Walt Disney Co. has cultivated close ties to Beijing. Disney has made massive investments in its theme parks in Shanghai and Hong Kong. The studio also relies on China’s box office might to propel its Marvel superhero movies to profitability.

Disney CEO Bob Iger has refused to publicly discuss China’s human rights abuses, saying last year that taking a position that could harm the company would be “a big mistake.”

With additional reporting by Gabrielle Reyes

Follow David Ng on Twitter @HeyItsDavidNg. Have a tip? Contact me at dng@breitbart.com





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Renewed calls to boycott Disney’s live-action Mulan over hat-tip in credits to Xinjiang authorities


There have been fresh calls to boycott the new live-action remake of Mulan after Disney included a thanks in the credits to Chinese Government authorities who have been linked to human rights violations.

The film, a remake of the much-loved 1998 animated movie, has previously been embroiled in controversy after one of the stars publicly supported police cracking down on independence protests in Hong Kong.

Mulan, which premiered in Australia on Disney’s online streaming service Disney+ on September 4, was filmed primarily in New Zealand and China, including desert scenes subtitled as “north-west China”.

In 2017, the New Zealand director of the $US200 million ($275 million) film, Niki Caro, posted on Instagram location scouting photos taken of sand dunes tagged at Urumqi, the capital of the Xinjiang Uyghur Autonomous Region.

The Chinese Government has been widely condemned for its detention and surveillance of Uyghurs and other Muslim minority groups in Xinjiang.

A shot from Mulan describes the setting as “Northwest China”.(Supplied)

There have been allegations of forced sterilisation of Uyghur women, forced labour in factories, and other measures amounting to what has been described as cultural genocide.

However, the Government has repeatedly denied its “vocational training centres” are concentration camps, and says the measures are necessary to counter what it calls extremism and terrorism.

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In Mulan’s credits, Disney offers “China Special Thanks” to the Publicity Department of CPC Xinjiang Uygher Autonomous Region Committee as well as the Publicity Department and Bureau of Public Security for the city of Turpan, which is north-east of Urumqi in Xinjiang.

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The United States Department of Commerce’s Bureau of Industry and Security in October last year added the Turpan Municipality Public Security Bureau to a list of Chinese entities “acting contrary to the foreign policy interests of the United States”.

“Specifically, these entities have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups in the XUAR [Xinjiang Uygher Autonomous Region],” the Department of Commerce said in a notification of the listing.

Human Rights Watch’s China director Sophie Richardson told the ABC that Disney’s public thanks raised questions about whether and how the company engaged with authorities in Xinjiang.

Ms Richardson questioned whether Disney thought through how that relationship would be perceived “at a time when most of the global discussion about Xinjiang is about appalling mass detention of people outside of any legal process on the basis of their ethnic and religious identity, about forced labour, torture and unparalleled destruction of religious freedom”.

Princess Fa Mulan
The animated version of Mulan was released in 1998.(Supplied)

“For any company, critical to these kind of engagements is having done some sort of human rights due diligence, which is what the United Nations guiding principles on business and human rights requires,” she said.

“I think it’s incumbent on Disney to explain what human rights due diligence they did in advance of cooperating with these authorities.”

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Last year, the hashtag #BoycottMulan started trending on Twitter after Chinese-American actress Liu Yifei, who plays the heroine in Mulan and has more than 66 million followers on Chinese social media platform Weibo, shared a post supporting police cracking down on independence protesters in Hong Kong.

She added an “IAlsoSupportTheHongKongPolice” hashtag with heart and arm-flexing symbols.

In February, Yifei was less strident in her opinion when interviewed by the Hollywood Reporter.

“I think it’s obviously a very complicated situation and I’m not an expert,” she said. “I just really hope this gets resolved soon.”

While Mulan is an online-only offering in the US and Australia, it has begun showing in theatres in Thailand, Taiwan, the Middle East, Singapore and Malaysia.

It will premiere in movie theatres in China next week.

Disney did not respond to questions from the ABC.



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Disney Channel’s ‘The Owl House’ Features Disney’s First Bisexual Lead Character


The Disney Channel’s animated series The Owl House features what is believed to be Disney’s first bisexual lead character. Show creator Dana Terrace revealed that Disney executives initially didn’t want a bisexual or gay character on the channel, but said they later changed their minds.

The Owl House, which debuted in January on the kid-oriented cable channel, is a supernatural animated series about a 14-year-old Dominican-American girl, Luz Noceda who embarks on a series of magical adventures as she becomes a witch. A recent episode revealed Luz’s sexuality when she dances with another female character, Amity, during a prom sequence.

Dana Terrace said that she wanted to create a character who reflected her own sexuality. “I’m bi! I want to write a bi character, dammit! Luckily my stubbornness paid off and now I am VERY supported by current Disney leadership,” she tweeted.

Terrace said she met resistance at first. “When we were greenlit I was told by certain Disney leadership that I could NOT represent any form of bi or gay relationship on the Channel,” she said.

Terrace added: “Representation matters! Always fight to make what YOU want to see! As OH [Owl House] continues I can’t wait to explore things that are important to me and my crew. Looking forward to the next chapter.”

The Owl House isn’t the first Disney property to feature an LGBTQ protagonist. Disney Pixar’s short movie Out, which debuted in March on the Disney+ streaming services, features a gay male protagonist.

Pixar introduced its first gay character in March in the animated movie Onward, with a lesbian police officer who is voiced by actress-writer Lena Waithe.

Follow David Ng on Twitter @HeyItsDavidNg. Have a tip? Contact me at dng@breitbart.com





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Who is Rebecca Campbell, Disney’s new head of streaming?


Change is in the air at Disney. Amid the novel coronavirus pandemic that has battered much of the company’s businesses, longtime Disney vet Rebecca Campbell is now chairman of the streaming segment otherwise known as direct-to-consumer and international.

Campbell’s appointment comes after Kevin Mayer, the departing streaming chief and dealmaking extraordinaire, resigned to become chief executive of the massively popular short-form video app TikTok (as well as chief operating officer of ByteDance, the Chinese company that owns TikTok). Mayer was once considered Hollywood’s top choice to succeed Bob Iger as CEO, but instead the gig went to former theme parks and cruise chief Bob Chapek. Disney’s new leader, it turns out, is well-acquainted with Campbell. She most recently served as president of Disneyland Resort, reporting directly to Chapek.

Campbell is moving from the parks side of the business to streaming at a time when subscriber gains on Disney’s streaming platforms—Disney+, ESPN+, and Hulu—happen to be among the few positives for the company as it navigates a crisis.

“Clearly, Ms. Campbell has the full confidence of Disney’s new CEO, and presumably also Mr. Iger and the Board,” Bernstein media analyst Todd Juenger wrote in a research note.

“Her elevation is probably best described as following the ‘best available athlete’ theory of talent cultivation (as opposed to the ‘best specifically suited resume’ theory),” he added, noting that the streaming industry’s relative newness means that “the list of ‘highly successful streaming executives’ is a very, very short list of very expensive individuals, none of whom are looking for work.”

Rebecca Campbell, Disney’s new streaming chief, is pictured with Will Smith at the European Gala Screening of Disney’s “Aladdin” on May 9, 2019.
Gareth Cattermole—Getty Images

But Disney, in Campbell’s promotion announcement, was quick to point out that she actually does have some experience on the streaming side. Prior to her role as Disneyland Resort president, she spent two years in London working as Disney’s president of the Europe, Middle East, and Africa (EMEA) region. “She played a critical role in the launch of Disney+ globally while overseeing the EMEA region,” Chapek said in the announcement. (It’s worth noting that Campbell was named president of Disneyland in September 2019 and assumed those duties in full by November—right as Disney+ launched in the U.S., Netherlands, and Australia, but months before it rolled out in select European countries in March.)

In addition to launch strategy, Campbell in her EMEA president role helped secure the first major distribution deal for Disney+ in the region and spearheaded the integration of 21st Century Fox with Disney’s operations in those territories. In general, she oversaw all of the region’s media, movies, and other operations with a group of 5,000 employees spread across 59 markets, with offices in 25 countries.

Throughout most of Campbell’s 23-year Disney career, however, she worked in local broadcasting. First joining the company in 1997 as vice president of programming at Philadelphia’s WPVI-TV, the local ABC affiliate, she worked her way up to president and general manager by 2003. In 2007 she moved to the same role in New York—the group’s flagship station and the nation’s largest television market—before earning a promotion in 2010 as president of ABC Owned Television Stations group. In this position she oversaw eight local TV stations—including New York, Los Angeles, and Chicago—and was responsible for national ABC TV sales and ABC Daytime programming. In 2017, she made the move to London.

So what challenges will Campbell face now in her new role? “She joins the business at a moment where the already thin original content pipeline has dwindled to essentially ‘nothing’,” Juenger wrote, speaking on the impact of coronavirus pandemic on film and television production. “There are also vitally important strategic decisions to be made on the future of Hulu, its brand and content and differentiation strategy, the role of Hulu Live, the international roll-out of Hulu, and what role ESPN+ should play in new sports rights negotiations, to name a few.”

“She will not have the luxury of time to contemplate most of these tough decisions,” Juenger added.

But Chapek is confident.

“As we look to grow our direct-to-consumer business and continue to expand into new markets, I can think of no one better suited to lead this effort than Rebecca,” the chief executive said. “Her strong business acumen and creative vision will be invaluable in taking our successful and well-established streaming services into the future.”

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