Personal Finance. Money. Investing.

The Walt Disney Company said on Wednesday that it would cut 32,000 jobs, primarily in its Parks, Experiences and Products division, in the first half of its fiscal year for 2021 – meaning by March.

The entertainment titan’s plans to terminate “approximately 32,000 employees” was revealed in a pre-Thanksgiving filing with the US Securities and Exchange Commission. The company had previously revealed plans in September to lay off 28,000 staff at its theme parks, which have been drastically affected by the COVID-19 pandemic and resulting lockdown measures.

"Due to the current climate, including COVID-19 impacts, and changing environment in which we are operating, the company has generated efficiencies in its staffing, including limiting hiring to critical business roles, furloughs, and reductions-in-force," Disney said in its SEC filing.

Disney’s theme parks division has been the hardest-hit by the pandemic, losing around $2 billion in operating income in the quarter ending June 2020. Florida’s Walt Disney World and California’s Disneyland were among the venues forced to close as initial lockdown measures were put in place, and while some have been reopened at a reduced capacity, others – like Disneyland – have reclosed or been forced to remain shut.

The filing also referenced losses in other segments of the company, reaffirming the temporary closure of its retail stores, and the suspension of its cruises and stage plays.


Disney was also forced to halt television and film production for the majority of the year, contending with higher expenses and slower production when work was resumed, the company said. It warned that its income may continue to decline even after the full recommencement of its business, owing to “the economic downturn caused by COVID-19” reducing consumer appetite for its goods and services.

Overall, Disney’s operating income in the year to 30 September was $8.12 billion, a 45% slump year-on-year. Revenue from its Parks, Experiences and Products division was also down by close to $7 billion compared to last year’s figures, with half as many theme park tickets sold.

Liberty Global and Telefonica, the respective owners of Virgin Media and O2, have announced their intention to merge, converging their services into a single telecommunications giant likely to present a major challenge to BT.

O2 is the UK’s largest phone company, with 34.5 million users on its network that covers Tesco Mobile, Sky Mobile and Giffgaff. Virgin Media has around 3 million mobile users and 5.3 million broadband and pay-television subscribers.

The combination of O2’s 4G and 5G infrastructure and Virgin Media’s ultrafast cable network will create a joint venture worth upwards of £31 billion.

Liberty Global’s chief executive, Mark Fries, emphasised the potential that the merger could hold. “Virgin Media has redefined broadband and entertainment in the UK with lightning-fast speeds and the most innovative video platform. And O2 is widely recognised as the most reliable and admired mobile operator in the UK,” he said in a statement.

Jose Maria Alvarez-Pallette, chief executive of Telefonica, described the coming partnership as “a game-changer in the UK, at a time when demand for connectivity has never been greater or more critical.


Analysts have begun to speculate on other possible motivations behind the merger, and its likelihood of success. Professor John Colley, Associate Dean at Warwick Business School, suggested that the move may be “opportunistic”, stemming from the focus of the Competition and Markets Authority (CMA) shifting its focus towards business survival during the COVID-19 crisis rather than the protection of competitive markets.

However O2 and Virgin Media are businesses that are benefitting from the present covid-induced state of affairs”, Colley continued. “One suspects that the CMA will take a keen interest in this merger.

Mike Kiersey, Principal Technologist at Boomi, a Dell Technologies business, commented that the success of the merger will likely hinge on the two companies’ ability to bring their respective infrastructures into harmony with each other:

To establish an efficient operating state, a clear integration framework must be put in place, whether that means the entities remain separate or embrace a purely integrated approach. In most cases, a symbiosis of both IT departments will be the likely result.

As the UK experiences a widening generational wealth gap, research from credit comparison experts TotallyMoney, uncovers how much different generations are spending or overspending - along with some tips so you can save for that three month trip to Thailand in no time.

61% of millennials feel like they overspend on entertainment - including nights out and trips to the cinema.

Where Do Millennials Overspend?

While the average Brit puts away £183.50 into savings each month, the research revealed millennials (born between 1977 and 1995) save less at around £176 a month. Millennials are also the most likely to run out of money before payday - with 24% saying this is the case, and the majority of these blaming it on their expensive spending habits rather than an overall lack of funds.

The survey also revealed 61% of millennials feel like they overspend on entertainment - including nights out and trips to the cinema, with a further 34% believing they spend too much on eating out.

Tips and Tricks:

We’re pretty sure you’ve thought of ways to save money - but here are a few others just in case you haven’t thought about it, or that final reminder to get you started:

Henry Keegan from TotallyMoney commented: “Property is certainly more expensive than ever, and interest rates are notably low at the moment – both of which make it hard for younger people to be as well off as their parents or grandparents

“But there is a noticeable trend that younger people might not be acting with a clear view towards saving for the future. Whether it’s higher spending on unnecessary purchases or an approach to spending which means that they run out of money when they need it, their spending habits may not always be in their best interests.

“We encourage everyone to do research, keep a budget, and use helpful tools to ensure they’re making smart financial decisions.”

(Source: TotallyMoney)

Video streaming services such as Netflix and Amazon Prime have now been reported to have more subscribers than traditional pay-per-view TV services in the UK, according to new figures released by Ofcom. This of course also applies on a global scale, in the US and beyond.

This week Finance Monthly asked experts in the media industry, communications sector and markets experts what they thought of the proliferation of online streaming services and their impact on traditional TV.

Luke McDowell, Context Public Relations:

Netflix is a brilliant example of a business that adapted and reinvented itself to become not only a giant of the streaming world, but the television and film industry as a whole. It is of no surprise that streaming service subscribers now outnumber the traditional pay TV subscribers.

British television has lagged behind the streaming services for a while now, it’s no longer enough to make your programming available on catch-up, you must now realise the market need for ‘binge-watching’; as this is where Netflix and Amazon Prime have cut their teeth. Users want to be able to experience a whole series in a matter of days or even hours, and as attention spans dwindle, so do the returning viewers on typical week-by-week scripted programming. I think the next big trend we will see is studios closing the gap between seasons, so we may even see one or two seasons of a show in the same year, in order to offset the inevitable audience number drop.

We have already seen some of the traditional broadcasters sell programming to streaming giants, either after the initial air date or in other non-native territories, which has been a step in the right direction. However, in order to future-proof themselves, traditional pay TV providers must cater to a new generation who want to watch content whenever and wherever they are, without the arduous wait for the next episode.

This generation also want the ability to pick and choose subscriptions, with one individual possibly having accounts with multiple services. In my experience of working with streaming services over recent years, this is something that was recognised by early contenders such as Roku who created a set-top box built for streaming that was smaller, more portable and more user-friendly than your typical offering, and offered compatibility across a range of services. Offerings such as TVPlayer have also started to bridge the gap between streaming and traditional British television by bringing live TV to younger, more mobile generations through their app; this is something traditional pay TV institutions should take note of.

John Phillips, Managing Director, Zuora:

It’s no secret that the media industry has changed. A few years back, it was in crisis. The shift towards digital meant advertising spend was predominately diverted to the tech powerhouses such as Google and Yahoo!, resulting in a widespread fear that consumers would never again pay for online content.

A few years later, we started to see a few media houses take control and implement basic paywalls in order to access premium content. This slight adjustment jumpstarted revenue, and for the first time since the crisis, brought growth in through their respective subscriber basis.

Since then, the wider media industry has caught on and subscription services have evolved tenfold. Today’s subscription services have morphed into flexible and adjustable models, where media brands have the power to create unique, effective and profitable plans.

From the standard rate plans for weekly, monthly or quarterly subscriptions, to flexible charge models - per article or per download - the ability to adjust has allowed media leaders to test and try what clicks with their subscribers. As a result, they’ve created a successful and reliable revenue model independent from advertising.

David Ciccarelli, CEO and Co-Founder,

Before I got married, we cut the cord to the TV. This was likely predicated by growing up in a household where there was a one hour limit on the amount of television we could watch. When considering starting a family of our own, my wife and I agreed that books and the Internet would be the primary source of news and knowledge entering the home. Since then, we’ve never been a cable subscriber, and I think I know why.

What Netflix does well is facilitating the act of discovery. First, by allowing viewers to create their own profiles, the platform recalls the shows that you watched, but also those in progress that you likely want to finish. By analysing the viewing habits of the individual, Netflix can make recommendations seemingly tailored to your unique preferences.

While recommendations are a good means of discovering new content, it’s equally enjoyable to navigate the categories of both movies and TV series’ in hopes of finding something new. Surely, TV networks could better organize their content using a similar structure. Let’s move beyond the timeline and give the viewer alternative paths for discovering what’s on right now, and in the future.

It’s well understood that TV is advertiser-supported. However, perhaps it’s time to innovate beyond standard ad formats, the ubiquitous 15 and 30-second spot. Shorter spots may be one option, or subtle overlays may welcome new advertisers looking to reach audiences in fresh new ways. While I certainly don’t claim to have the answer on this one, I’d like to encourage broadcasters to consider this space ripe for innovation.

Both Netflix and the movie theatre experience are very immersive. In our household -- and I’ve heard of others doing the same -- sitting down for a show on Netflix, even one as short as a single episode, involves getting snacks, drinks, and blankets on a cold day. When visiting others, I have yet to see or hear of a similar ritual when flipping through the channels on TV for an indefinite period of time. Live sports may be the rare exception. Nonetheless, programming could be designed in such a way for the viewer to suspend their disbelief. Constant interruptions ruin the flow of the experience. Networks should consider new ways to keep the viewer watching and engaged.

Chris Wood, CTO, Spicy Mango:

British TV will have to change the way it operates if it wants to compete with internet giants such as Amazon and Netflix. OTT providers are under still under no obligation to adhere to the usual broadcast guidelines, giving consumers access to content whenever they want it. On the other hand, the linear world is still heavily regulated, particularly around watershed, and this essentially positions OTT at an advantage and has allowed those businesses to innovate faster.

Increased regulation, processes and rules are proven factors of reducing innovation, which the Broadcast sector has seen a lot of in current years. When boundaries are allowed to be pushed, technology has space to innovate and becomes more attractive to different businesses. The fact is, that internet giants free from regulation have completely captured the market and audience today and consequently the traditional broadcasters have been left behind. But how could we introduce regulations that apply to all and how would it work? How would a watershed rule be enforced in catch-up OTT? Would it require credit card verification to prove age? Is PIN enforcement enough? Or should it be enforced at all? Rather than locking everyone in, why don’t we open the doors?

Providers like the BBC need to be freed from constraints like this in order to innovate. With less and less Millennials tuning into live TV and more opting for paid for streaming services like Netflix on a device of their choosing, there is little value for this demographic in their TV license fee if they are only going to watch odd World Cup match or the news. OTT products and services have grown rapidly – primarily because of the flexible nature of viewing that is offered. For British TV to grow its user base and capitalise on these benefits – it’s time to remove the shackles.

The result would give viewers more platform choices and enable content developers to create more relevant programmes for their audiences.

Chris Lawrence, Head of UK Communications, Media and Technology Consulting, Cognizant:

In many ways, we are living a golden age for television. Technology giants, like Netflix, have raised the bar, spending more than ever before on high quality shows. It has become clear that to keep up, broadcasters need to make sure that they are investing more money on producing shows and films that draw in audiences. But in order to spend additional budget on production, cost savings need to be made elsewhere.

That is why broadcasters are using technology to streamline back-end operating costs. Automating back-end operations is a crucial step towards greater agility, enabling broadcasters to maximise revenue from content. A good example of this is UKTV’s investment in a new broadcast management system to provide greater flexibility to schedule and manage content across its channel brands and support Video on Demand viewing.

Broadcasters also have a chance of winning back customer loyalty through providing a slick customer experience and reducing any friction along the customer journey. Reacting to this challenge, last year the BBC announced it would be using artificial intelligence (AI) to “better understand what audiences want from the BBC". The initiative, launched in partnership with eight UK universities, will take the learnings and directly apply them to the BBC’s UK operations. The use of AI to boost the customer experience and streamline services will crucially enable broadcasters to invest more heavily in the front of screen services. Because ultimately, content is king.

James Gray, Director, Graystone Strategy:

As technology has changed so have subscription models and hence we now have a shift towards Amazon Prime and Netflix from pay TV. There was a time when TV content was consumed by a family with one subscription per household and only one device - a TV - in the house to watch it on.

Now individuals consumers have multiple content subscriptions and many different devices so they can access programmes on the bus, in the park, at the station, by the pool on holiday, and in a different room to another family member. Smart phones and tablets have enabled this, as well as the availability of wifi and more recently better rates for data and data roaming.

 But there are some real polar differences as to which customers take which TV service. Graystone segmentation analysis shows that older customers “Settled Seniors” have the lowest take up of Pay TV, with 53% having Pay TV like Sky or Virgin and only 17% taking internet TV models like Netflix or Amazon. Unsurprisingly the Technology Trailblazer segment, which is much younger, has the highest adoption rates - 65% and 56% showing that they are taking multiple subscriptions. It’s a clear indicator of where the market is going and where providers need to place their bets.

The younger segments are also far more transactional, so for example if a show moves from Prime to Netflix they will move too. Amazon’s move into football will no doubt cause some ripples in the market. It illustrates that as well as offering convenience, the content has to be right too. You must know what your customers like and provide more of it - Netlfix is very good at producing original drama for this reason.

What fascinates me is where the subscription economy is going. I can pay for shaving products, gin, dog food even socks on a monthly subscription. We can’t be far away from a time when all subscriptions can be managed under one mega bundle - TV, mobile, broadband, gas, electric, gin, socks, car access, and who knows what else.

As millennials care less about ownership and more about experience and access, we will see more and more subscription models managed via smart phone apps. And for companies that has to be a great thing, particularly if consumers manage their subscriptions like my gym subscription - 36 monthly payments to date and just 5 visits! (But next month I am definitely going more regularly!)

Alistair Thom, Managing Director, Freesat:

With a raft of new entrants in the market and increasing choice for consumers driving change in viewing habits, there’s no argument that TV services in the UK and elsewhere are facing tough challenges.  Whether that’s competing for content rights against global companies with huge budgets or facing up to new distribution opportunities offered by online services.

Yet from a Freesat perspective, we believe that Ofcom’s report suggests that new entrants offer a great opportunity for subscription free platforms like ourselves. While On Demand services offer new choice and flexibility for customers, they do not offer all of the content customers want, nor can they offer the same level of shared experience as the “appointment to view” TV moments found on traditional broadcast TV; whether that’s amazing sporting events like the World Cup, global spectacles like the Royal Wedding or this summer’s “OMG TV” in Love Island.

Our research[1] has shown, that the most watched programmes are consistently those available on free channels, even in homes signed up to a pay TV subscription. These pay platforms must now face up to the additional challenge to their business models offered by new entrants with lower monthly fees and no long-term contracts.

I strongly believe that the UK has the best free-to-air TV in the world and while methods of entertainment consumption are clearly evolving, especially amongst younger viewers, there will still be a place for more traditional viewing in the changing media landscape for many years to come.

[1] Freesat carried out omnibus research with OnePoll in May 2017, surveying 2,000 TV subscribers on their TV habits.

PwC has released its 18th annual Global Entertainment and Media Outlook 2017-2021, an in-depth, five-year outlook for global consumer spending and advertising revenues directly related to entertainment and media (E&M) content. Rapid changes have created a gap between how consumers want to experience and pay for E&M and how companies produce and disseminate their offerings. E&M companies were accustomed to competing and creating differentiation primarily based on two dimensions: content and distribution. Now, they must focus more intensely on a third: user experience (UX).

Global E&M revenues are expected to rise from $1.8 trillion in 2016 to $2.2 trillion in 2021 at a compound annual growth rate (CAGR) of 4.2% – down from the 4.4% CAGR the firm forecast last year. By comparison, PwC's 2017 Outlook expects US E&M revenues to reach $759 billion by 2021, up from $635 billion in 2016, increasing at a CAGR of 3.6% – holding steady at the same CAGR as last year. While there are increases in revenue, E&M is approaching an industry plateau. Traditional, mature segments are in decline; the internet and digital E&M content is growing though at a slowing rate; and the next wave of content and entertainment is in areas, such as e-sports and virtual reality, which are just beginning to accelerate.

"E&M companies are operating amidst a wave of geopolitical turbulence, regulatory changes and technological disruption. Even if the macro context is set aside, these companies are facing significant pressures on growth," said Mark McCaffrey, PwC's US Technology, Media, and Telecommunications Leader. "In order to thrive in the marketplace, PwC suggests that these companies understand and develop sustainable relationships with consumers to advance their UX. Pursuing a growth and investment strategy to enhance and differentiate the UX will help them flourish in an era where a changing value chain is slowing top-line growth from the traditional revenue streams that have nourished the E&M industry to date. Essentially, we've entered The Age of the Consumer. It's no longer sufficient to be 'consumer-centric,' one must be 'consumer-obsessed.'"

PwC has identified eight emerging technologies as having the biggest potential to improve UX: augmented reality (AR)/virtual reality (VR); artificial intelligence (AI); Internet of Things (IoT); Big Data/data analytics; cloud; 3D printing; access, not ownership; and cybersecurity.

"The next era of differentiation in E&M is being defined and propelled by consumers' increased demand for live, immersive, sharable experiences. Consumers want to get closer, more engaged and better connected with the stories they love – both in the physical and digital worlds," said Deborah Bothun, PwC's Global Entertainment & Media Leader. "At the same time, companies can start to empower those experiences through a number of emerging technologies. Perhaps big data and artificial intelligence will create the most dramatic change, redefining how the industry can connect with all stakeholders and drive growth. We're already seeing a number of ways that AI is being used to personalize, customize and curate entertainment content and experiences at scale."

Key US Entertainment & Media Highlights –
A total of 68M Virtual Reality (NEW) headsets will be in use in the US by 2021 with the installed base growing at a CAGR of 69.2% over the forecast period. In fact, the segment is projected to add nearly the same revenue as TV advertising between 2016 to 2021, a total of $4.6B. VR truly started to reach consumers in 2016 and has no legacy issues or false starts to look back on. The downside is a highly immature market with underdeveloped business models, flaky hardware, and lots of experimental or low-quality content. 2017 should at least see major advances in "inside out" movement tracking and lower cost headsets. It's worth noting VR's close relationship with the gaming market, yet many news and content organizations are pinning their hopes on VR to reinvigorate programming and recapture audiences lost to the internet.

Video Gaming continues to be a paradox: at once a large, growing business and yet a market where firms can fail in record time and new business models arise seemingly from nothing. It is this dynamism that both fascinates and concerns financial markets and partners in media, telco and IT spaces. Video games revenue was $21.0B in 2016 and is forecast to grow by a 6.3% CAGR to reach $28.5B in 2021.

The development of E-sports (NEW) has contributed to the video gaming boom. The nascent genre's revenue is forecast to reach $299M in 2021, from $108M in 2016, rising at a 22.6% CAGR. The US is the largest market in revenue terms, having overtaken South Korea in 2015, although the latter will stay far ahead in terms of per-capita revenue. Not only does the ongoing popularization of competitive gaming by broadcasters bring new consumers into the gaming fold, but the games themselves help to boost online/microtransaction revenues on both consoles and PCs.

Data Consumption (NEW) is forecast to reach 290.7T MB by 2021, up from 117.9T MB in 2016 and representing a 19.8% CAGR. The US will remain the largest market in the world in terms of data traffic in 2021, ahead of China despite the latter's faster growth. The single biggest driver of growth is the increased adoption of smartphones, and in particular the rise of video streaming on smartphones. Video represents 83.4% of all data traffic in 2016, ahead of other digital content (7.8%), and music (3.1%). By 2021, video will account for more than 247T MB of data in the US, some 85% of total traffic.

The US Internet Video (NEW) market is by far the largest and most established in the world, accounting for 47% of global revenue in 2016. This percentage is expected to fall to 43% by 2021 as internet video becomes more established in others regions, although international growth will be driven by US companies' expansion overseas. Internet video will grow at a 9.6% CAGR – the fourth largest US E&M segment CAGR, following Virtual Reality, E-sports and Internet Advertising, respectively – to produce revenues of $18.8B in 2021. Nearly 75% of revenue at this time will be attributable to subscription video-on-demand (VOD) services, with transactional VOD platforms accounting for the remainder.

Internet Advertising revenue in the US reached $72.5B in 2016, comfortably the largest market in the world. This figure is forecast to reach $116.2B in 2021, rising at a CAGR of 9.9%. While it was previously predicted that internet advertising would overtake TV advertising in 2017, the former actually surpassed the latter by the close of 2016. New tech innovations, especially around AI, will create both challenges and opportunities for incumbent players. The introduction of new screens, such as those in connected cars; the rollout of new content formats, like VR; and changes in the way we interact with technology, such as voice-activated search, create opportunities for new ways of engaging with and advertising to audiences. However, all require innovation and investment in order to meet their potential. Separately, the dominant force that is mobile advertising comprised 50.5% of total internet advertising revenue in 2016, rising from 34.7% the previous year and besting the contribution from wired internet advertising in the process. By 2021, PwC expects mobile to account for 74.4% of all US internet advertising.

Cinema revenue will grow over the forecast period by a 1.3% CAGR. Specifically, box office revenue will rise from $10.6B in 2016 – the biggest box office year in all of American history – to $11.2B in 2021, a CAGR of 1.2%. PwC had expected China to overtake the US in box office revenue in 2017, which would have marked this as the first time the US has not held the leading position in an E&M segment. However, the second half of 2016 and the first half of 2017 were much softer at the Chinese box office than had been expected. That said, Chinese cinema revenue is still the most lucrative and the fastest-growing in the world. The big studio blockbusters remain the driving force, but the perennial debate about the three-month exclusive "window" for films in cinemas is intensifying – especially faced with intensifying competition from disruptors.

The Music industry has continued to turn the corner on nearly two decades of decline. The market was worth $17.2B in 2016. Total music revenue is forecast to increase at a 5.6% CAGR to reach $22.6B in 2021. The ongoing growth of digital music streaming – up an astonishing 99.1% year-over-year in 2016 to total $3B – was THE music story of last year as consumers turned in huge numbers to on-demand services. Competition for new subscribers will likely be fierce in 2017. In addition to the uptick in streaming, the live music sector continues to deliver, with fans appearing to have a nearly insatiable appetite for music events and festival brands eager to franchise overseas.

Additional Industry Segment Data Points –

(Source: PwC)

About Finance Monthly

Universal Media logo
Finance Monthly is a comprehensive website tailored for individuals seeking insights into the world of consumer finance and money management. It offers news, commentary, and in-depth analysis on topics crucial to personal financial management and decision-making. Whether you're interested in budgeting, investing, or understanding market trends, Finance Monthly provides valuable information to help you navigate the financial aspects of everyday life.
© 2024 Finance Monthly - All Rights Reserved.
News Illustration

Get our free monthly FM email

Subscribe to Finance Monthly and Get the Latest Finance News, Opinion and Insight Direct to you every month.
chevron-right-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram