Most of Disney’s own businesses had a great quarter. Walt Disney Studios, for instance, released three runaway hits — “Avengers: Endgame,” “Aladdin” and “Toy Story 4” — and ESPN delivered increased profit as a result of higher advertising revenue and bigger fee payments from cable providers. Results were weaker than expected at Disney’s theme park business, however. Star Wars: Galaxy’s Edge, a new area at Disneyland that cost an estimated $1 billion to build, opened in late May to mostly rave reviews. Analysts expected Galaxy’s Edge, the largest expansion in Disneyland’s 64-year history, to attract beyond-capacity crowds. But the 14-acre addition, at least in its initial weeks, had “attendance that was below what we hoped it would be,” Mr. Iger said. Some people, he said, may have stayed away because they feared long lines, but he also pointed out that Disney was unveiling Galaxy’s Edge in phases, delaying the opening of one major ride until January. Jessica Reif, an analyst at Bank of America Merrill Lynch, noted that the cost of visiting Disneyland had increased considerably in recent years. “I don’t remember a time when they have raised prices this much,” she said. One-day adult admission to Disneyland during the busy summer months costs $149. Off-peak tickets cost $104. Ms. Reif added, however, that she wasn’t worried about Disneyland attendance for the year. “I wouldn’t be concerned unless there is negative attendance,” she said. Disneyland had 18.7 million visitors in 2018, up 2 percent from a year earlier. “We do not feel that we have a pricing issue,” Mr. Iger said. Disney is scheduled to open a nearly identical version of Galaxy’s Edge this month at Walt Disney World in Florida.
Disney has reported a 51% fall in profits to $1.44bn for its first quarter after buying most of Fox for $71.3bn. Rising streaming costs were blamed and CEO Robert Iger said the period had been part of a “strategic transformation” at Disney as it cuts its dependence on declining cable channels. Developing new streaming platforms has been expensive, and the Disney division that includes streaming saw losses rise from $168m to $553m. The company said those losses would rise to $900m. Netflix is also facing pressure over how much money it makes off each subscriber.