Disney's new CEO explains the 3 pillars of his growth strategy
Josh D’Amaro’s Disney just exceeded expectations after a hectic few weeks.
Disney’s revenue grew 7% to $25.2 billion in its quarter ending March 28, the company said on Wednesday morning, above the $24.87 billion estimate from analysts polled by Bloomberg.
Earnings per share rose 8% to $1.57 per share, excluding certain charges, compared to Wall Street’s consensus estimate of $1.51 per share.
D’Amaro, who took over for longtime CEO Bob Iger in mid-March, wrote in a letter to shareholders that the company is “executing aligned to a long-term strategy built on three pillars.”
Here they are:
- Investing in IP and creativity that breaks through, builds connections, and endures
- Reaching more consumers in more seamless, engaging ways around the world
- Using advanced technologies to power our storytelling and increase monetization and returns
“We are strengthening streaming through continued investment in the creative storytelling that defines us and in product and technology innovation, while advancing ESPN’s direct-to-consumer future, and delivering on our bold growth plans at Disney Experiences,” D’Amaro wrote.
Entertainment revenue rose 10% to $11.72 billion in the quarter, topping analysts’ estimates for $11.4 billion, thanks to 14% growth from subscriptions and affiliate fees.
Revenue for the experiences division that D’Amaro used to run — which includes parks, cruises, and products — climbed 7% and slightly exceeded the expected figure of about $9.4 billion.
The sports segment, anchored by ESPN and its revamped appsaw revenue tick up 2%, to just above the $4.59 billion estimate.
D’Amaro’s honeymoon didn’t last long
It’s been an eventful few weeks at the Mouse House.
Less than a month after D’Amaro took the top job, Disney announced a major round of layoffs. The mid-April reorg hit marketing teams especially hard. Laid-off employees were given severance pay based on their level and tenure, Business Insider reported.
The Mouse House is also contending with the FCC, which filed an unusual early renewal request of ABC’s broadcast licenses — days after late-night host Jimmy Kimmel made a joke about Melania Trump that provoked the anger of the first lady and President Trump.
Another curveball came when OpenAI canceled its deal with Disneywhich would have put AI-generated videos on Disney+ and given employees access to the enterprise version of ChatGPT. Disney ended up putting short-form vertical clips on its flagship streamer anyway, as have rivals Paramount+Peacock, and Netflix.
And in D’Amaro’s first week as CEO, the company shelved the debut of one of its biggest shows, “The Secret Lives of Mormon Wives,” after a controversy around star Taylor Frankie Paul.
Embracing AI
Disney also recently cut stock-based compensation for some tech staffers, Business Insider reported.
The Mouse House has also been encouraging employees to use AI and has created an “AI Adoption Dashboard,” Business Insider reported. Some staffers are using chatbots tens of thousands of times per month, and some who don’t use AI have gotten check-in messages from their higher-ups.
Disney also shook up its streaming commerce and data teams after the departure of Ajay Aroraformerly the SVP of product management and engineering, Business Insider reported.