It came near the end of trading on Tuesday, which may have been the only reason The Walt Disney Company’s stock didn’t drop any lower. The stock, which has been buffeted by Disney+ intrigue over the past 18 months, saw a steep and immediate sell off once CEO, Bob Chapek, said Disney+ subscriptions may slow significantly. According to Chapek, both production and subscriptions are likely to come in far below prior market expectations.
Chapek blamed the lack of Disney+ growth and new content on the Delta variant of COVID-19. He provided no evidence that the variant was to blame, and it does seem odd that a disease that isolates people would result in lower streaming subscribers. The converse would seem to be the natural tendency, although perhaps Disney has data that backs up their statement not available to the general public at this time.
“We are going to see a little bit more noise than maybe the Street projects quarter to quarter. The resurgence of Covid and delta did impact some of our productions.” — Bob Chapek, The Walt Disney Company CEO
Chapek did not address the issue with Disney+ original content having seemingly stolen work from a YouTube channel without recognition or compensation.
How the stock will respond on Wednesday will be of great interest to investors. Chapek’s statement to the Goldman Sachs Communacopia Conference was certainly planned, and may foretell worse news to come… or perhaps be a way to set up a self-made beating of expectations. Whatever the case may be, Disney is prepping everyone to recognize that Disney+ is not the dominating subscription service they might have expected. That title still goes to Netflix, who has their own issues moving forward.