Disney released its fourth-quarter and full-year earnings reports, and the financial picture looks promising. Total revenue in 2023 will increase 7% to $88.9 billion, driven by growth in the company's entertainment and experiences businesses.
The parks and experiences sector contributed $32.5 billion, a 16% increase from 2022. Stronger guest spending at Disneyland resorts in the U.S. and internationally, as well as increased Disney Cruise Line bookings, were behind the increase. However, Walt Disney World Resort revenue fell year over year due to the closure of Star Wars: Galaxy Star Cruiser and fewer daily hotel room bookings.
CEO Bob Iger has identified the Disney Parks and Experiences business as one of the company's four key construction opportunities. In September, he announced plans to double investment in Disneyland to $60 billion by 2033. Another 14 new attractions are scheduled to open next year, including Snow World at Hong Kong Disneyland Resort and the maiden voyage of Disney's sixth cruise ship.
The other three areas of growth are ESPN, Disney+ (Disney expects to be profitable in the fourth quarter of 2024), and improving the economics and production of its movie studios.
Disney's full-year entertainment revenue edged up slightly (3%) to $40.6 billion, leaving the studio behind four of the 10 highest-grossing films of 2023 globally, with Guardians of the Galaxy Vol. 3 ($845 million) ), "The Little Mermaid" ($569 million), "Element" ($495 million) and "Ant-Man and the Wasp: Quantum of Madness" ($476 million).
The Disney+ streaming business is also growing in 2023, with the platform adding 7 million subscribers in the fourth quarter (Disney's fiscal year ends in September) for a total of more than 150 million. The company's direct-to-consumer revenue, which includes revenue generated from services such as Disney+, Disney+ Hotstar and Hulu, grew 12% to $5 billion.
Disney will spend $27 billion on content in 2023, $3 billion less than the previous year. The investment reduction is part of its ongoing goal to save $7.5 billion in costs by the end of 2024. Disney plans to cut another $2 billion from content spending in 2024 (targeting $25 billion) to help it recover from the 2023 strike and accelerate Disney+ profitability.
Disney's streaming business lost $512 million in the most recent quarter, bringing its total streaming losses to more than $11 billion since the launch of Disney+ in 2019. All the declines came from India's lower-priced version of Disney+. Last year, Disney failed to renew its expensive rights to the Indian Premier League. There are reports that Disney plans to either sell its India operations or find a joint venture partner. Reliance Industries, a Mumbai-based multinational, is preparing to acquire a majority stake in Disney's Indian operations.
