Even Covid-19 Cannot End Disney's Enduring Magic

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Disney's DIS blowout third quarter that beat expectations across the board was fueled by growth in Disney+ subscribers and parks returning to profit. But now that Walt Disney World's 50^th anniversary is around the corner, things are looking even better.

50th-anniversary celebration

Walt Disney World is gearing up for its celebration which starts on October 1. Dining is returning to Orlando, Florida park as preparations are ongoing. The fact that normal operations are resuming at parks is a good sign that the company is on track when it comes to guest and travel confidence, which translates to an improved bottom line. The party tickets are sold separately from park entry tickets which implies an exponential growth as this segment was literally crushed by the pandemic one and a half year ago. The celebration will open a busy holiday travel season so it can be assumed that Disney stands to benefit from an increase in guest spending, from large purchases like annual passes to shopping for seasonal merchandise. As for the outlook, 2022 is looking brighter for the Parks, Experiences and Products segment.

Delta variant is looming

However, Covid continues plaguing the entertainment industry and the world for more than 18 months now, and there are fears that new variants will reverse the progress at Disney's biggest moneymakers as theme parks and cruise lines are its lifeblood. Box office revenue also wasn't exempt from the devastating blow despite management trying to reinvent the release structure to drain as much benefit as possible. Streaming also resulted in a compensation-related and public lawsuit from Scarlett Johansson who found like many of her colleagues she was severely harmed by this model.

The White House steps in

On Wednesday, U.S. President Joe Biden met with several top U.S. leaders, including the CEO of Disney, Bob Chapek, as part of his ongoing effort to push companies to require workers to be vaccinated against COVID-19 as the delta variant rages on. Participants in the meeting also included Microsoft Corp MSFT and Walgreens Boots Alliance Inc WBA. However, corporations such U.S. automakers General Motors Co GM and Ford Motor Co F are encouraging employees to get the vaccine, but they remain quiet about the executive order. The White House hopes that this meeting will serve "as a rallying cry for more businesses across the country to step up and install measures to boost vaccination rates.

Luckily for Disney that it released Disney+ when it did

Direct to consumer division that includes several streaming services besides Disney+, including ESPN+, Hulu has benefited from people being much more at home. Launched in November 2019, just a few months before the pandemic struck, Disney+  has literally kept Disney afloat while the other divisions struggled to keep their heads above water. Without this division, Disney would not have a rare bright spot over the past year and a half.

The magic lives on

Almost a century-old company has endured many things, but the COVID-19 pandemic was by far the worst crisis that the entertainment giant faced as its business model was perfectly exposed to this invisible enemy. Although COVID held its cash cows hostage, the power of Disney goes beyond the physical experience. Back in August, Target TGT revealed it will nearly triple the number of Disney shops inside its stores to more than 160 by the end of year, in an attempt to increase foot traffic ahead of the anticipated holiday season. Target hopes that Disney can help it stand out and raise its toy department's price point. Over almost a century, Disney's brand evolved while staying loyal to the core values of its founder. In doing so, it became a synonym for storytelling that brings magic to life. Its "once upon a time" earned it an iconic status that made this global brand stronger than any virus-related fear.

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