It’s hard to imagine a stronger entertainment empire than Walt Disney Co (NYSE:DIS). It was a force to be reckoned with even before acquiring Marvel and Star Wars. With those two franchises it seems like Walt Disney Co (NYSE:DIS) all but controls the box office. However, appearances can be deceiving. This appearance of strength flies in the face of the third year in a row with declining top-line growth.
There’s quite a few factors which can explain this trend. One of the biggest factors is cord cutting among millennials. Cord cutting describes the practice of creating households without cable subscriptions. And the practice is creating a dramatic cut in viewership of the Walt Disney Co (NYSE:DIS) Channel. Millennials cut the cord, and their children grow up never tuning into the channel. Binge watching TV is also becoming far more common. People are growing up expecting to be able to simply watch seasons of a show in one sitting if they so desire. The binge watching model is something which the company simply hasn’t made much use of. All of these trends are creating a huge hit for the company’s strongest market. Walt Disney Co (NYSE:DIS) movies and theme parks are the most easily recognizable parts of the brand, it’s the channel itself which has been their biggest property.
Currently Walt Disney Co (NYSE:DIS) third-quarter revenue is going up, but at a rate which isn’t making people very happy. The 1.1% growth is fairly negligible compared to what people might expect from the media giant. This overall pattern has been a constant for around six years now. This is despite the ownership of most of the biggest movie brands. Walt Disney Co (NYSE:DIS) studio arm is doing quite a bit better now than it has in the past though. While still the third biggest money maker for the company, their studio branch is finally showing increasing performance from their newly acquired properties. This is also helping improve Walt Disney Co (NYSE:DIS) financial growth from theme park sales. Rides themed after the company’s latest big movies are proving to be good money makers. Overall growth is slow, but it might not be a bad idea to remember that slow growth is still growth.