Bob Chapek became Walt Disney (SAY) – Get The Walt Disney Company Report CEO in February 2020. That means he basically took over the top job when the pandemic hit. Chapek did not have a honeymoon period. Instead, he immediately had to make tough decisions about closing theme parks, canceling theatrical releases of some movies in favor of moving them to the Disney+ streaming service, and laying off workers.

The new CEO had to manage all of these things with his predecessor Bob Iger as chairman and many believing the old boss was still in charge. Chapek was successful, however, and Iger eventually retired, giving the new CEO some breathing room.

Things haven’t gotten easy for Chapek as the pandemic remains a factor in theme park attendance around the world and the movie industry remains in flux, but the Mouse House roared. This gave the still-new CEO a chance to not only manage the crisis, but also move the company forward.

Chapek shared a lot of thoughts on the future of Disney during the second quarter earnings call. And while the CEO didn’t claim all the issues were resolved, he sounded optimistic and encouraged.

“In the second quarter, Disney employees and cast continued to execute on our strategic priorities of excellence in storytelling, innovation and audience focus, and I couldn’t be more proud of what they’ve done. done,” he said. “Our strong results this quarter, including the fantastic performance of our national parks and the continued growth of our streaming services as well as the creative achievements of our content teams, have once again proven that we are in a league of our own. .”

Disney theme parks bounce back

The pandemic has devastated the global theme park industry, and Disney has been hit as hard as anyone. Many of its parks experienced lengthy closures and then reopened with capacity constraints. Chapek made it clear that the theme park group had reached a milestone, highlighted by its flagship products Disney World and Disneyland in the United States.

“As I said, our national parks have stood out. They continue to operate at full capacity, fueled by strong demand coupled with customized guest experience enhancements that have increased per capita spending by more than 40% compared to 2019. Response to next generation telling stories like Star Wars: Galactic Starcruiser has been phenomenal,” he shared.

Chapek noted that the much-maligned new hotel, which opened on March 1, has received “incredibly high consumer reviews and consistent with our best deals.” He also noted that demand is strong and “we expect 100% utilization through the end of the third quarter.”

The CEO also spoke enthusiastically about the performance of some of the company’s global theme parks.

“At Disneyland Paris, we are thrilled to take the next step in our ambitious expansion plan: the opening of Avengers Campus this summer as part of the resort’s 30th anniversary celebration,” he shared. . “As Europe recovers from the pandemic, we have seen strong yield growth at Disneyland Paris and look forward to its continued recovery.”

Scroll to continue

Disney+ continues to grow

Disney+ has been one of the biggest success stories of the pandemic. The service quickly exceeded initial expectations and continued to grow. Chapek used the term “standout” to describe not just Disney+, but all of the company’s streaming services (which include Hulu and ESPN+).

“We ended the second quarter with over 205 million total subscriptions after adding 9.2 million during the quarter. This includes 7.9 million Disney+ subscribers, bringing us to 230 million to 260 million Disney+ subscribers by FY24. The platform’s growth since launch reinforces its unique nature. Quite simply, we believe Disney+ is one of a kind, a service based on exceptional branded content with broad appeal across all four quadrants,” he shared.

Chapek also noted that Disney+ is not just a family service, pointing out that nearly half of subscribers are adults without children. The CEO expects new content to drive global growth.

“We currently have over 500 homegrown original titles in various stages of development and production,” he explained. “180 of these titles are expected to be released this fiscal year, growing to more than 300 international originals per year on a steady-state basis. We believe these premium local originals, along with branded content with broad international appeal, will attract new subscribers and drive engagement.”

ESPN has been a source of strength

Even before the pandemic, there were a lot of questions about ESPN’s future due to the cord cut. Chapek remains optimistic about the sports network and its potential for growth.

“ESPN’s viewership was particularly strong for the quarter for both live events and in-studio programming with double-digit ratings, and we remain encouraged by how fans are interacting with outgoing sports content. of the pandemic,” he shared. “The NBA Playoffs opening weekend was the most watched in the last decade, and the ratings were fantastic with more than 4.3 million viewers on average across 20 games on ABC and ESPN Our groundbreaking NHL deal is unique in its exposure on ESPN, ESPN+, ABC and Hulu, culminating in the Stanley Cup Playoffs, which kicked off May 2.”

Disney has a unique and powerful business model

Chapek has made it clear that Disney can leverage its content and intellectual property in ways that other companies simply cannot.

What sets Disney apart is our ability to reach people with our unique and engaging content across an array of touchpoints to make our portfolio of companies and brands a bigger part of their lives. This not only allows us to create new franchises like “Encanto”, but also to leverage existing intellectual property in our lines of business. An example of this is our Toy Story franchise, which was created nearly three decades ago with the release of the first film in 1995 and is now coming to fruition across distribution platforms, geographies, companies and time. . At our parks, we’ve built a portfolio of four immersive Toy Story lands with over 20 attractions and live character interactions available worldwide, as well as two themed hotels.

It’s a model that no other company can achieve at the level of Disney. Chapek explained the business model even further.

“Nearly 30 years after the film’s debut, Toy Story is still a key consumer product franchise, generating more than $1 billion in annual retail sales,” he said. “And in a few weeks, Pixar’s Lightyear will tell the origin story of everyone’s favorite space ranger when it hits theaters on June 17. Of course, Toy Story is just one of our many franchises, but it exemplifies our unparalleled ability to bring stories to life in more ways for more people in more places.”