The paragraph serves as the introductory segment of The Walt Disney Company's fourth quarter and full-year 2024 financial results conference call. The operator welcomes participants, noting that the call will be in a listen-only mode and that there will be an opportunity for questions later. Carlos Gomez, the Executive Vice President and Head of Investor Relations, provides further welcome remarks and reports that the earnings press release, Form 10-K, and prepared management remarks are available online. He also mentions that the call is being webcast, and replays, transcripts, and a presentation will be accessible on the company's website. Additionally, he issues a caution regarding the forward-looking statements made during the call, noting that they are based on current views and assumptions and are subject to risks and uncertainties that could cause actual results to differ.

The paragraph outlines various factors affecting the company's performance, such as economic conditions, competition, and regulatory developments. It mentions that non-GAAP measures will be discussed and reconciliations are available on their Investor Relations website. Bob Iger, Disney's CEO, expresses pride in the company's progress over the past two years and highlights their strategic efforts to drive growth. He notes the company's solid quarterly results and growth momentum, with expectations for high single-digit adjusted EPS growth in fiscal 2025 and double-digit growth in 2026 and 2027. Iger credits his leadership team and Disney employees for positioning the company for this new era of growth.

The paragraph highlights Disney's renewed focus on creativity, leading to significant success in both television and film. Their TV programming is receiving extensive acclaim, exemplified by winning 60 Emmy Awards, and their films such as "Inside Out 2" and "Deadpool & Wolverine" have dominated the summer box office. Upcoming films like "Moana 2" and "Mufasa: The Lion King" are highly anticipated, and the 2025 slate includes promising titles like "Captain America: Brave New World" and "Zootopia 2." Disney's movie successes now generate greater value due to increased consumer touchpoints across various platforms, enhancing the company's storytelling impact and system economics. The Parks and Experiences segment remains industry-leading, with a targeted investment strategy aimed at driving growth. Disney is expanding its global footprint with multiple park expansions and the Disney Cruise Line's fleet is growing, with the Disney Treasure set to debut soon and seven more ships in development.

The paragraph discusses Disney's strategic initiatives and accomplishments. It highlights a collaboration with Epic Games to expand Disney's brands into a new games and entertainment universe. Disney+ has grown significantly, reaching 174 million subscribers combined with Hulu, and is set to introduce an ESPN tile on December 4th, marking a new era for ESPN. Disney has secured long-term rights to popular sports to enhance its streaming offerings and plans to launch ESPN's direct-to-consumer service by fall 2025. Overall, Disney is focused on sustaining growth and creating shareholder value through its diverse portfolio, and they are now ready to take questions from the audience.

The paragraph features a dialogue between Ben Swinburne from Morgan Stanley and Robert Iger about ESPN's strategic shift to streaming. Swinburne asks about the anticipated impact of the ESPN flagship launch on sports fans and how it will drive future growth despite existing linear challenges. Iger responds by emphasizing that the new offering will revolutionize ESPN's consumer experience by integrating core services like live sports coverage with technology-driven enhancements. This includes features like fully integrated betting and the potential for personalized content, such as an AI-driven sports center, highlighting the transformative role of technology in sports presentation.

The paragraph discusses the future of personalized sports experiences, emphasizing how ESPN will enhance the consumer experience with highly customized, mobile, and feature-rich products, benefiting both viewers and advertisers in an app-based, live sports-focused world. Hugh Johnston then shifts the discussion to the experiences segment, explaining the financial outlook influenced by events like hurricanes and prelaunch costs, predicting negative impacts in Q1 but expecting positive growth throughout the year due to factors such as the introduction of "The Treasure," reduced labor costs at Disneyland Resort, and strengthening consumer demand and bookings.

The paragraph features a discussion during a Q&A session where Jessica Reif Ehrlich from BofA Securities asks about the outlook on consolidated advertising growth and CapEx for the upcoming year. Robert Iger responds by highlighting the strength of linear advertising due to its ability to deliver a differentiated audience compared to streaming. He mentions that integrating linear and streaming offerings provides advertisers with broader options, citing examples like ESPN and ABC collaborating to broadcast live sports like the NFL, college football, and NBA. This approach offers differentiated audiences and multiple platform access, proving successful. Hugh Johnston is also mentioned but doesn't contribute significantly to the discussion at this point.

The paragraph discusses Disney's optimism about its advertising prospects for 2025, highlighting their proprietary ad technology as a competitive advantage, particularly in the streaming sector. Robert Iger mentions Disney's collaboration with Google and YouTube to offer differentiated advertising audiences. A new hire, Adam Smith from YouTube, is focusing on technology improvements for Disney's streaming services, with priorities including the launch of an ESPN feature on Disney+ and enhancing user engagement through personalization. The conversation also touches on future financial goals, specifically achieving strong double-digit margins in direct-to-consumer services by fiscal 2026, excluding Hulu Live.

The paragraph discusses strategies to enhance customer engagement and achieve double-digit margins for Disney+ and Hulu. Key actions include improving the recommendation engine, targeting password sharing, unifying tech stacks, and expanding anti-password sharing initiatives to 130 countries. To boost margins, the company plans to grow subscribers, leverage the high-margin nature of incremental subscribers, increase pricing aligned with content value, and enhance product features to reduce churn. Additionally, improving ad monetization through advanced ad tech is also a priority.

The paragraph discusses Disney's strategic approach to providing financial guidance, particularly in light of past mixed experiences under previous management. Steven Cahall from Wells Fargo asks about the ideological approach to guidance, including the role of conservatism, and queries about EPS growth from fiscal 2025 to 2026, flagship launch costs, ARPU, and breakeven timelines. Hugh Johnston responds by explaining that their guidance is primarily driven by improvements in direct-to-consumer products (DTC) and ongoing investments in parks, cruise ships, and consumer products. Despite the significant investment, they feel positively about the results.

The article paragraph discusses the company's strategy of providing investors with a comprehensive overview, including expectations for returns on their multiyear investments. The company is confident in its plans and guidance, offering a long-term outlook. The flagship product is expected to contribute positively by 2026, with initial investments occurring in 2025. Additionally, Robert Iger highlights the company's strong content pipeline and notes that the release or anticipated success of new films tends to increase the consumption of previous related films, as observed with titles like Inside Out, Moana, and various Marvel properties. The paragraph concludes with a mention of upcoming films in 2025, including Zootopia and Avatar.

The paragraph discusses future entertainment releases and strategic considerations for a company. It mentions upcoming films like a Star Wars film, Mandalorian and Avengers film, and a live-action Moana, expressing confidence in these projects' commercial and qualitative success, which should boost streaming performance. John Hodulik from UBS asks about the possibility of divesting or consolidating the cable networks, following Comcast's example, and if a change in administration alters merger and acquisition opportunities. Additionally, he inquires about the expected impact of the Epic Universe launch on the parks business. Robert Iger responds by addressing the consolidation aspect, referencing their 20th Century Fox asset acquisition in 2017 with a focus on streaming.

The paragraph discusses the strategic focus on streaming and content distribution, highlighting that Disney's acquisition of valuable assets, including control and ownership of Hulu, has significantly contributed to their success in the streaming market, with around 174 million global subscribers. The speaker affirms that Disney has already consolidated sufficiently in terms of content and distribution, implying they do not need further acquisitions to thrive in the media landscape. Separately, Hugh Johnston reflects on past considerations for divestitures at PepsiCo, noting that while financial models may suggest value creation, actual benefits depend on sale prices and the operational costs of asset separation.

In the paragraph, the speaker discusses Disney's financial strategy, indicating there wasn't a value-creating opportunity for them with certain assets, unlike other companies. They note a positive outlook for experiences due to favorable early bookings for the next summer and beneficial historical patterns when new attractions open in Florida. Michael Morris from Guggenheim then asks about content production and investment strategies, focusing on growth beyond 2025 and returns from new U.S. park expansions. Robert Iger responds by highlighting a focus on streaming business growth, with potential for selective international investment, particularly in EMEA and APAC, while having slowed down investment in those regions.

The paragraph discusses a careful investment strategy in technology and content for a streaming business. The focus is on improving technology to reduce churn and optimizing content investment for better returns before significantly increasing spending. International markets, especially those outside the U.S., are seen as growth opportunities with tailored content strategies. The company plans to invest incrementally in content, ensuring it doesn't disrupt overall cash flow. They see international expansion as promising and will balance pricing and attendance in their park experiences for optimal results, allowing flexibility based on future learnings.

The paragraph features a question from David Karnovsky of JPMorgan during a call, asking about the strategy for managing the linear network business and the impact of the DirecTV agreement on Disney. Hugh Johnston responds by explaining that while they anticipate a decline in linear networks, Disney is well-positioned due to its strong streaming subscriber base, which offers a natural hedge. He highlights the company's ability to monetize both linear and streaming audiences effectively. Regarding the DirecTV deal, Johnston notes that such agreements are uniquely tailored to each partner and should not be seen as a template for future deals. He emphasizes that both Disney and DirecTV are satisfied with the arrangement.

In the paragraph, Laurent Yoon from Bernstein asks about the sources of growth in streaming, specifically whether it will come more from subscriber increases or pricing changes, particularly by fiscal year 2025. Yoon also inquires about Disney's plans for expanding local language content to boost engagement in international markets, noting that competitors seem more active in this area. Hugh Johnston responds by indicating Disney expects growth from both subscribers and pricing, with pricing likely playing a slightly larger role. He mentions existing local content efforts in regions like APAC and Latin America but states that more aggressive investment will depend on being comfortable with product performance and churn levels. Robert Iger adds that Disney's two billion-dollar movies this year have performed well worldwide, illustrating their global market resonance.

The paragraph discusses a company's strategy to shift consumers toward its advertiser-supported streaming service (AVOD) by increasing subscription prices. Currently, 60% of new U.S. subscribers opt for AVOD, constituting 37% of total U.S. subscribers and 30% globally. The pricing strategy aims to attract more advertisers due to the growing interest in streaming. The conversation then shifts to a question about divestitures in India, specifically regarding a deal with Reliance, a significant company in the region. The company will retain a stake in the high 30% range after the partial sale of assets in India.

In the paragraph, Tim discusses Disney's business management and financial expectations with Reliance. Bryan Kraft from Deutsche Bank asks about the performance of Disney's parks and Disney+ growth. Robert Iger responds, stating that domestic park performance is improving, with consumer strength expected to continue. However, international parks experienced softness, partly due to the impact of the Olympics in Paris. Regarding Disney+, Iger acknowledges strong international subscriber growth but doesn't specify the exact cause, suggesting it could be due to seasonality or other factors.

The paragraph discusses consumer softness in Shanghai, anticipated to be temporary with an expected rebound. It mentions steady international subscriber additions following success in Q3 and Q4. Carlos Gomez thanks participants for their questions, and the conference call concludes with well wishes from the operator.

This summary was generated with AI and may contain some inaccuracies.