Disney Will spend $24 billion on content in fiscal 2026, up $1 billion from last year and split roughly 50-50 between sports and entertainment, Chief Financial Officer Hugh Johnson said.
Looking ahead: “I think that mix is likely to hold up quite well. If anything, entertainment may grow a little faster than sports,” he said at the Wells Fargo TMT conference, with an expansion of “content that is very specific to certain markets. We have a strategy for international expansion in select markets that we think are attractive.”
He said Disney's own content “is distributed globally and well-received, but we need to complement it with local content to ensure high levels of engagement and retention. So the strategy is very much geared towards that.”
Disney's fiscal year ends in September.
Disney's spending has fallen significantly from about $30 billion a few years ago as Mouse and other media companies chased streaming subscribers.
“I think almost everyone at the time… was overproducing. And we talked about the fact that we were unhappy with some of the quality because we were working so hard to create content. I think we're doing a pretty good job of that now. I think you'll see content costs continue to rise, but they'll grow at a rate that's substantially slower than revenues. [for] DTC business.”
Asked how the company allocates costs across its various brands, including Disney, Pixar, Marvel and Lucasfilm, Johnston said: “Obviously we evaluate these market segments and allocate them based on where we think growth can be. But there's also an element of where do the best ideas come from? One of the things I've often said is that money doesn't attract ideas, ideas attract money. So in many ways, when we tell stories, it's really where the best ideas come from, and the decisions our entertainment executives make to allocate capital based on where they think we are most likely to achieve the highest level of success.”
There will be a big release Avatar: Fire and Ash December 19. Johnston said he's seen parts, not the whole film, and “it's absolutely spectacular. It also cost a lot of money to make. But it's absolutely spectacular. So, we're certainly optimistic about the film in terms of repeating what you've seen.” [director] Jim Cameron has done this in the past. But like I said, these films don't come cheap.”
