Disney will spend $24 billion on content in fiscal 2026, up $1 billion from last year and split about 50-50 between sports and entertainment, said CFO Hugh Johnson.
Going forward, “I think that that mix is likely to hold reasonably well. If anything, entertainment may grow a little bit faster than sports,” he said at the Wells Fargo TMT conference, with expansion in “content that is very specific to certain markets. We’ve got a strategy around expanding internationally in individual markets that we find attractive.”
He said Disney’s own content “travels globally and is well received, but we need to supplement that with local content to ensure that we keep engagement high and we keep retention high. So the strategy is very much to do that.”
Disney’s fiscal year ends in September.
Spending at Disney is well down from about $30 billion several years ago as the Mouse and other media companies chased streaming subscribers.
“I think almost everyone was … over-producing at that time. And we’ve talked about the fact that we weren’t happy with some of the quality because we were pushing so hard to produce content. I think we’ve got it dialed in pretty well right now. I think you’ll see content expense continue to grow, but it’ll grow at a rate that’s substantially slower than the revenue [for] the DTC business.”
Asked how the company allocates spending between its various brands including Disney, Pixar, Marvel and Lucasfilm, Johnston said, “Obviously, we go in … evaluating those market segments and allocating based on where we think the growth may be. But there’s also an element ofm where are the best ideas coming from? One of the things I’ve often said is money does not attract ideas, ideas attract money. So, in a lot of ways, with the storytelling we do, it’s really where the best ideas come from, and the judgment of our operating executives in the entertainment business to allocate the capital based on where they think we’re likely to have the highest level of success.”
A big release will be Avatar: Fire And Ash on Dec. 19. Johnston said he’s seen parts, not the entire film, and “it is absolutely spectacular. It also cost a lot of money to make. But it is absolutely spectacular. So, we’re certainly optimistic about the movie, from the standpoint of being a repeat of what you saw [director] Jim Cameron do in the past. But as I said, those movies are not cheap.”
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