The Walt Disney Company is known for entertaining people across the globe, but current stock prices hint that the mass media conglomerate may have lost some of its magic. Disney stocks were downgraded last week by investment advisory company KeyBanc Capital Markets “over fears of stalled growth at its Disney+ and Hulu streaming services and lower attendance at its theme parks”. A downgrade is a negative adjustment to a security ranking that arises when current business activities and future outlooks change significantly from what was first recommended by analysts, but how “off” were those recommendations?

Wall Street estimated the company would end the 2nd quarter with 163.17 million Disney+ subscribers, up from 161.8 million in the 1st quarter. Unfortunately, Disney reported a loss of 4 million Disney+ subscribers down to157.8 million. In the scheme of things, 4 million doesn’t sound like a lot until you consider what each subscriber was paying per year which comes out to approximately $400,000,000. While Disney is restructuring, Bloomberg intelligence says “2023 is a transitional year with 3Q streaming losses expected to rise to around $800 million.” The parks, on the other hand, are down in attendance and guest satisfaction but not in revenue. In the recent quarter Disney reported a 17% increase in revenue to $7.8 billion coming from its 12 Disney parks worldwide.

Rising ticket prices and longer wait times for rides have continued to result in decrease attendance at Disney World since the park celebrated its 50th Anniversary in the fall of 2021. One-day ticket prices at the park range from $109 to $189, a little less for children ages 3 to 9, $104-$184. A family of four would spend an average of $536 for one day at the Magic Kingdom, not including food, drinks, transportation, or accommodations. One would think spending a fortune would result in a guaranteed magical experience and yet without adding Disney Genie+ for an addition $35 per ticket, wait times for rides can be anywhere from 40 to 90-minutes or more which means it may only be possible to ride on 4-5 attractions within a 10-hour day. The bottom line is that people want and need to be entertained but most can’t afford to pay what Disney charges for streaming services, parks, resorts, cruises, etc.