Disney CFO Christine McCarthy warned that carriage costs for pay-TV bundle Hulu + Live TV would drive an $800 million to $1 billion increase in streaming costs during the current quarter.The internet-delivered TV package now had 4.3 million subscribers, the company revealed in its fiscal first-quarter results, and has increased the number of networks it offers customers.
Disney+, meanwhile, is pursuing a years-long plan to boost offerings in pursuit of subscriber growth, while ESPN+ shoulders significant rights costs.Along with the streaming increases, linear expenses “may impact our second quarter results,” McCarthy said.Linear networks will see a roughly $500 million increase in programming and production costs, McCarthy predicted, blaming “factors including Covid-related timing shifts.” Disney’s networks also aired four additional NFL games at the start of the current quarter (a result of the league expanding its season), plus this year’s Academy Awards will be in March.
The 2020 Oscars had slid back to April, a different fiscal quarter, due to the pandemic.Content Sales/Licensing and Other will also face difficult comparisons, McCarthy said.
She estimated there will be a $200 million hit to operating income compared with fiscal 2021, due to the company holding back on titles for its own streaming outlets.Asked during a conference call with analysts about the company’s outlook for breaking even on Disney+, McCarthy said there is no change to the view for break-even by fiscal 2024.
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