Business

Consumers thought streaming would be forever, but library content is disappearing as studios seek to cut costs.
Wall Street has turned up the heat on media companies, now focusing on if and when streaming will be profitable versus if they’re putting up big subscriber numbers.
Removing content from streaming platforms is a way for streamers to avoid residual payments and licensing fees.

The Disney+ logo is displayed on a TV screen in Paris, December 26, 2019.
Chesnot | Getty Images

Streaming was supposed to be forever.
That was the promise of a digital library of movies and TV shows.

Consumers got used to Netflix cycling through titles, aware that as Hollywood studios launched their own streaming services, proprietary content would transition to a new platform.
Even when Warner Bros. Discovery pulled content as part of planned tax write-offs tied to its merger, consumers seemed to accept the move as the cost of doing business.
However, as Disney is set to yank dozens of shows and films from Disney+ and Hulu, including “Willow,” “The Mighty Ducks: Game Changers” and “The Mysterious Benedict Society,” subscribers are suddenly faced with a new reality.
“At first I expected any show that was on a streaming platform would stay on that platform,” said Conrad Burton, 35, an account manager at a transportation company in Raleigh, North Carolina. “But then I started noticing things expiring.”

What’s the deal?

After the initial bloom of new platforms and subscriber growth, aided by pandemic lockdowns and a surge of fresh content, the digital streaming industry has cooled. And Wall Street has turned up the heat on media companies, now focusing on if and when streaming will be profitable versus if those providers are putting up big subscriber numbers. The change came last year after Netflix reported its first subscriber loss in a decade. 

“What is hitting their income statements is the amortization of content that’s already been made and released,” said Michael Nathanson, an analyst at SVB MoffettNathanson. “Warner Bros. Discovery was the first one to figure this out, so we have to give credit where it’s due. They said they need to get their earnings up, so they started taking shows off the app. Disney is now doing that and we should expect Paramount to follow suit. And one day Netflix may even do the same thing.”
It’s been difficult for consumers to understand why content made specifically for streaming platforms has been removed, especially when Netflix originals remain untouched in its library. 
“From a consumer standpoint, what they want is they want to be able to always have access to their content,” said Dan Rayburn, a media and streaming analyst.
“The part that really confuses consumers is because they don’t understand how content is licensed,” he said. “They do get confused when one day content is on a service and then disappears or the content is still in the service, but it’s only X number of seasons.”
Removing content from platforms is a way for streamers to avoid residual payments and licensing fees.
“Much like syndication of Hollywood’s yesteryear, streaming services must pay for the right to host a title,” explained Brandon Katz, an industry strategist at Parrot Analytics.
He noted that if a title is not owned by the streamer, then a licensing fee must be paid to the studio that owns that content. For example, Hulu licenses “The Handmaid’s Tale” from MGM Television.
Even titles that are owned in-house must be licensed. That’s why NBCUniversal had to pay itself $500 million to stream Universal TV’s “The Office” on Peacock and Warner Bros. Discovery paid $425 million for the streaming rights to the WBTV-produced “Friends.”
“The balance sheet must reflect that,” Katz said.

In this photo illustration, the Max logo is seen displayed on a smartphone, the HBO Max and Discovery+ logo in the background. 
Rafael Henrique | Lightrocket | Getty Images

By removing the content specifically made for streaming rather than licensed shows and movies, Warner Bros. Discovery and Disney can immediately cut expenses. Warner Bros. Discovery saved “tens of millions of dollars” after eliminating content, CNBC previously reported. 
The studio’s removal of movies and TV shows began last summer, initially with titles such as the “Sesame Street” spinoff “The Not-Too-Late Show with Elmo” and teen drama “Generation.” 
But in the ensuing months, more and more original HBO and Max content was removed. Most notably, the sci-fi dramas “Westworld” and “Raised By Wolves” disappeared. 
“In my opinion, it discourages subscribers from checking out future original content,” said Matt Cartelli, 33, from New York state’s Hudson Valley. “Streaming used to be seen as a safe haven for consumers who were sick and tired of seeing shows canceled on traditional TV. Now streamers are following suit by canceling their own underperformers.”
Cartelli was especially disappointed when he learned Disney+ initially planned to remove “Howard,” about a songwriter whose work was heard in Disney films such as the animated “The Little Mermaid.” Disney reversed its decision about that title after facing backlash on social media.
And streamers have a fine line to walk.
“The risk is with the writers’ strike,” Nathanson said. “If it continues for awhile, then they will rely on library content. If there’s nothing on there, churn will only get worse.”

Should it stay or should it go?

Streaming services are being strategic about what sticks around and what leaves their platforms. Major hits such as Max’s “Peacemaker” or Disney’s “The Mandalorian” are unlikely to be pulled from their respective apps.
Meanwhile, underperforming shows and films could be on the chopping block.
In the first quarter of the year, the demand for the dozens of shows and movies being cut from Disney+ represented only 1.9% of the total Disney+ catalog, according to data from Parrot Analytics. For comparison, “The Mandalorian” accounted for 1.3% of total demand during the same period.
Similarly, the removed titles for Hulu accounted for just 0.4% of demand on the streaming service.
And these titles aren’t lost forever.
Soon after cutting programs from Max, Warner Bros. Discovery began licensing the content to Fox Corp.’s Tubi and Roku, which are free, ad-supported streaming television platforms — also known as FAST — allowing it to bring in a new source of revenue for the content. 
As media companies have been desperate to make streaming profitable, the businesses have been turning more and more to new advertising strategies, from cheaper, ad-supported offerings to putting content on FAST channels.
“My main takeaway is that nothing is guaranteed to remain on streaming forever. You are paying for a convenient way to watch content, but it is not a replacement for buying a movie or TV show on home video,” Cartelli said.  More

Global demand for Asian films and TV shows has risen in recent quarters, driven by easier access on streaming services and hit shows like Netflix’s “Squid Game,” according to data provider Parrot Analytics.
While supply of Asian content is still outpacing audience demand, the gap is closing.
Korean content makes up the bulk of Asian content libraries, but demand for Chinese and Japanese language has been rising.

Scene from “Squid Game” by Netflix
Source: Netflix

The popularity of Netflix’s hit drama “Squid Game” and other Korean series, as well as the recent success of films like “Minari” and “Everything Everywhere All At Once,” has helped boost the demand for Asian language movies and TV shows globally.
A large part of that demand comes as U.S. viewers have easier access to global content than ever before thanks to major streaming services such as Netflix and Warner Bros. Discovery’s Max, as well as niche offerings like Rakuten Viki, which focuses on Asian entertainment.

Streaming services’ unwieldy libraries have led to some media companies implementing cost-cutting efforts to make the apps profitable. But investment in Asian, especially Korean, content is still high.

Loved around the world

The share of global demand for Asian language content reached 25% in the first quarter of this year, up from about 15% in the same period in 2020, according to data provider Parrot Analytics.
While supply of such content outstripped demand — meaning there’s more produced than people are watching — the gap between the two is narrowing, said Brandon Katz, an entertainment industry strategist at Parrot. During the first quarter, supply was 4.7% greater than demand in the Asian language category, an improvement from 9.8% in the first quarter of 2020.
“Some might think that supply outstripping demand globally could mean a slight pullback in investment could be on the table. But that gap is very much shrinking,” Katz said, pointing to the success of Netflix hits such as “All of Us Are Dead” and “The Glory.” “There is steady progress being made, which was reflected in 2022.”
Since the beginning of this year, those titles, along with “Squid Game” and “Extraordinary Attorney Woo” have continuously claimed four spots on Netflix’s global top 10 non-English TV hits. Thriller show “Squid Game” took the first spot for a spell.

Last month, Netflix said it would grow its Korean content, roughly doubling the total investment since the company began its offering in Korea in 2016. The behemoth streaming service said it plans to invest $2.5 billion over the next four years to produce more Korean shows and movies. The investment comes after 60% of all Netflix members watched at least one Korean title in 2022.
While global demand for Korean-language TV shows has increased since early 2020, it has still been outpaced by the supply of the content. Meanwhile, that demand has stagnated in comparison to other Asian language TV series, specifically Japanese and Chinese, according to Parrot.
Netflix will focus on more than the increasingly popular Korean drama genre, Don Kang, Netflix’s vice president of Korean content, recently told CNBC’s “Squawk Box Asia.”
“Our primary focus is the local audience in Korea. We’ve found time after time, when a show is loved by a Korean audience, it has a very, very high likelihood of being loved by the audiences or members around the world,” Kang said.

Beyond the mainstream

Netflix is part of a larger trend. Its popular shows — along with hit Asian American films such as “Minari” and “Everything Everywhere All At Once,” which recently swept the major awards at the Oscars this year —have benefitted other streaming platforms and opened the U.S. audience up to exploring more Asian movies and TV shows.

Arrows pointing outwards

Rakuten Viki homepage
Source: Rakuten Viki

Rakuten Viki, a streaming service owned by Japanese ecommerce giant Rakuten, has seen a surge in growth in recent years across various Asian language content.
The company said its registered user base grew by 27% globally in 2022, leading the streamer to increase its investment in content by 17% that year. Korean content remains the majority of what is consumed on the service, but viewership for Japanese, Chinese and Thai-language shows increased, too.
Karen Paek, vice president of marketing at Rakuten Viki, said in an interview that while the company has been in the Asian entertainment space for more than 10 years, it’s recently seen a growing interest and passion around the world for its shows, which are mostly licensed.
“For Viki specifically, we have been seeing a shift in terms of the ethnic makeup of our viewership toward non-Asians,” Paek said. “But at the same time, the whole audience size is growing.”
Paek said the streamer sees a boost in registered viewers and viewership in general when hits like “Squid Game” hit the mainstream.
The user base for Rakuten Viki has been so passionate that the subtitles for much of its content are actually generated by a volunteer community around the world. Its content is mainly produced and created in Asian countries, although the service licenses hits like “The Farewell,” especially during Asian American Pacific Islander month, for its U.S. audience.
Other streaming services are taking a similar approach. Max said it would increase and highlight Asian content during AAPI month.
“We are seeing an audience shift in terms of what they are open to watching outside of K-dramas,” Paek said, pointing to Chinese and Japanese dramas, as well as the “Thai boy love genre,” which has been a big hit for the service. More

A new partnership is encouraging Black student-athletes to consider working in the commercial real estate market after graduation.
The arrangement is a new focus from Project Destined — a nonprofit founded by former Carlyle Group principal Cedric Bobo to promote ownership for young students of color.
Some of the largest real estate development, finance and management firms have signed on to fund the internships and mentor the students.

Cedric Bobo discusses a new program for Black student-athletes to transition into the commercial real estate market.
Diana Olick | CNBC

When Darius Livingston graduated from the University of California, Davis, two years ago, he knew his football career was over. Like most of his former teammates — and the majority of college athletes — he wasn’t going pro.
Instead, Livingston went into commercial real estate, thanks to lessons he learned from a paid internship program that teaches young students of color the fundamentals of finance, with a particular focus on real estate investing.

The program, Project Destined, is a nonprofit founded by former Carlyle Group principal Cedric Bobo.
Bobo made a name for himself in real estate investing and then decided to pay it forward. He launched the finance program in 2016 primarily for high school students. Then he broadened it to colleges, seeing the opportunity for both internships and jobs before and after graduation.
Eager to diversify their workforces, some of the largest real estate development, finance and management firms have signed on to fund the internships and mentor the students. That includes names like Boston Properties, Greystar, Brookfield, CBRE, Equity Residential, Fifth Wall, JLL, Skanska, Vornado and Walker & Dunlop.
The program has trained more than 5,000 participants from over 350 universities worldwide and has partnered with over 250 real estate firms.
And now, it’s gearing some of its efforts specifically toward Black student-athletes.

After doing a pilot program recently with student-athletes from UC Davis, Bobo has announced a partnership with the Black Student-Athlete Summit, a professional and academic support organization, to offer paid, virtual internships to 100 student-athletes from nine Division I schools. It includes 25 hours of training.
“Program participants will also join executives to evaluate real-time commercial real estate transactions in their community and compete in pitch competitions to senior industry leaders,” according to a release announcing the partnership. “The internship includes opportunities for scholarships and networking.”
Livingston went through the UC Davis pilot in his last semester of college, then got internships with Eastdil and Eden Housing. He is now an acquisitions and development associate at Catalyst Housing Group, a California-based real estate development firm and a financial backer of the new partnership.

“I think, for me, it was really a realization that I probably won’t be a first-round draft pick, and that’s OK,” explained Livingston. “It’s really being exposed to other opportunities. That’s why I’m so blessed to have Project Destined come along and expose me to the commercial real estate industry and the mindset that I deserve to be an owner in the communities that I live in.”
That right of ownership has long been Bobo’s mantra and was the crux of his pitch as he announced the new arm of his program to hundreds of students at the Black Student-Athletes Summit at USC. He wants them to understand that they can create change in their own neighborhoods by owning and managing real estate. More important, he wants them to know that ownership is possible.
“Our program is not just about how we see you all,” Bobo said of the real estate executives who were on hand for the announcement. “It’s how you see yourselves.”
While the graduation rate for Black student-athletes is improving slowly, a lot of students who were showered with resources in school find themselves struggling once they finish their athletic endeavors and get out in the workforce.
“A lot of these kids may think they’re a first-round draft pick, and that is a percent of a percent of a percent of a percent, so it’s really being real with yourself and knowing that you deserve much more than what you’re simply exposed to, and that’s just sports,” Livingston said.
Financial support for the program comes from real estate firms including BGO, Brookfield, Catalyst Housing Group, Dune Real Estate Partners, Jemcor Development Partners, Landspire Group, Marcus & Millichap, Virtu Investments and The Vistria Group, among others.
“The expansion of this platform is a natural evolution of this collective effort and will provide tangible pathways for thousands of Black student-athletes to pursue future careers in commercial real estate,” said Jordan Moss, who is also a former student-athlete at UC Davis and the founder and CEO of Catalyst.
Project Destined also has been working with the NBA and the WNBA to give professional athletes more options after they’re finished with their athletic careers.
Livingston said he thinks athletes make the best employees.
“We play to win,” he explained. “It’s the competitive nature. We want to outwork our opportunities.” More

A surprise deal between Ford Motor and Tesla on electric vehicle charging technology and infrastructure could put new pressure on other automakers’ EV strategies.
Ford CEO Jim Farley and Tesla CEO Elon Musk announced the deal Thursday during a live audio discussion on Twitter Spaces.
RBC Capital analyst Tom Narayan said the Ford-Tesla deal could be a near-term negative for GM and other automakers.

DETROIT – A surprise deal between Ford Motor and Tesla on electric vehicle charging technology and infrastructure could put new pressure on other automakers’ EV strategies.
The tie-up between the two rivals will give Ford owners access to more than 12,000 Tesla Superchargers across the U.S. and Canada, starting early next year. More importantly, Ford’s next generation of EVs — expected by mid-decade — will use Tesla’s charging plug, allowing owners of Ford vehicles to charge at Tesla Superchargers without an adapter.

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The agreement will make Ford among the first automakers to explicitly tie into the network.
Ford CEO Jim Farley and Tesla CEO Elon Musk announced the deal Thursday during a live audio discussion on Twitter Spaces. On Friday morning, Farley acknowledged the tie-up would create challenges for Ford’s rivals.
“I think GM and others are going to have a big choice to make,” he said on CNBC’s “Squawk Box.”
Farley’s comments referenced which EV plug should be standard for charging in the U.S. A charger known as CCS is the industry norm now. Tesla vehicles and its Supercharger network use what’s known as NACS. Other vehicles can use both, but they need an adapter.
“The CCS is a great standard, but it was pretty much done by kind of a committee, and I think GM and others are going to have a big choice to make,” Farley told CNBC. “Do they want to have fast charging for customers? Or do they want to stick to their standard and have less charging?

Ford’s stock rose by 6.2% Friday, closing at $12.09 per share. Tesla’s shares also climbed 4.7% Friday, ending the week at $193.17.

The Ford-Tesla deal could be a near-term negative for GM, Stellantis and other automakers that don’t have access to as many fast chargers, which are considered crucial to expand EV adoption, said RBC Capital analyst Tom Narayan
“The news is obviously a positive for Ford shares today (and potentially near term negative for GM/STLA), but ultimately, we think this should be viewed as Tesla playing the long game,” Narayan said in a Friday investor note.
Tesla says it has roughly 45,000 Supercharger connectors worldwide at 4,947 Supercharger Stations. The company does not break out how many are in the U.S. The U.S. Department of Energy reports the country only has about 5,300 CCS fast chargers.
General Motors, without specifically addressing Farley’s comments, said Friday it “believes that open charging networks and standards are the best way forward to enable EV adoption across the industry.” GM said it is working with a group of companies and SAE International, formerly the Society of Automotive Engineers, to develop and continue to refine an open connector standard for CCS, which it said was important for “the buildout of an open network of fast charging across North America.”
The Detroit automaker has announced several partnerships with EV charging providers and lobbied for more federal support for such infrastructure.

‘Totally committed’

Ford is “totally committed” to a single U.S. charging protocol that includes the Tesla plug port, Farley said Thursday.
Musk, when announcing the deal with Farley, alluded to other automakers being able to use the Tesla Supercharger network and the company’s charging ports.
“Working with Ford, and perhaps others, can make it the North American standard, I think that consumers will be all better for it,” Musk said Thursday.

An all-electric Ford Mustang Mach-E at a Tesla Supercharger station charging.

Tesla previously discussed opening its private network to other EVs. White House officials announced in February that Tesla committed to opening up 7,500 of its charging stations to non-Tesla EV drivers by the end of 2024.
Public charging of electric vehicles is a major concern for potential buyers, and no automaker other than Tesla has successfully built out its own network. Instead, they’ve announced partnerships with third-party companies that have often proven unreliable and frustrating to owners.
Most U.S. drivers log vehicle miles from home to locations nearby. But EV buyers who want to take longer road trips, or who do not have access to a garage with a charger, often worry about access to reliable, public charging.
The issue is getting worse: at least 1 in 5 charging attempts by drivers failed last year, according to a study on public charging released last year by J.D. Power.
Tesla’s Superchargers were ranked the best for overall customer satisfaction, according to a separate new study from J.D. Power.

Wall Street bullish

Wolfe Research analyst Rod Lache called the deal a “win-win,” as it more than doubles Ford customers’ access to fast chargers and increases Tesla’s network’s utilization.
“For Ford, access to Tesla’s network helps solve a major pain-point for their EV customers, who otherwise have to use third-party charging providers,” he said in a Friday investor note. “Meanwhile, for Tesla, adding Ford customers will help boost network utilization, a key driver of profitability.”

Jim Farley and Elon Musk
Getty Images

The deal is a major boost to access to fast-chargers for Ford and its customers, Morningstar analyst David Whiston said. He added that it “puts some pressure on other legacy automakers but if you are someone like GM, I don’t think you need to panic.”
Whiston said he would like to know more about the deal, such as cost, length and other details that were not announced.
A Ford spokesman said more information about the agreement will be announced closer to Tesla’s chargers opening up to Ford owners early next year.
– CNBC’s Michael Bloom, Lora Kolodny and John Rosevear contributed to this report.
Clarification: This story has been updated to clarify that SAE International was formerly known as the Society of Automotive Engineers. More

Disney urged a federal court to reject a request by Florida Gov. Ron DeSantis to disqualify the judge overseeing the company’s lawsuit accusing the governor and his allies of political retaliation.
The effort to remove the judge in Disney’s civil case in U.S. District Court in Tallahassee, Florida, came days before DeSantis launched his 2024 presidential campaign.

Chairman of The Walt Disney Company Bob Iger.
Drew Angerer | Getty Images

Disney urged a federal court to reject a request by Florida Gov. Ron DeSantis to disqualify the judge overseeing the company’s lawsuit accusing the governor and his allies of political retaliation.
Attorneys for DeSantis had argued that Judge Mark Walker should recuse himself from the lawsuit over his comments in two separate cases that referenced the clash between the governor and the entertainment giant.

Disney — which has been feuding with DeSantis since last year, when the company came out against his bill that critics have labeled “Don’t Say Gay” — responded that the defendants’ argument failed to meet the legal standard for disqualification.
“Judges are not prohibited from referring accurately to widely-reported news events during oral arguments, nor must they disqualify themselves if cases related to those events happen to come before them months later,” Disney’s lawyers argued in a court filing Thursday.
“Disqualification is allowed only if the prior comments expose an incapacity on the judge’s part to consider the new case on its own merits,” the lawyers wrote, adding that the judge’s comments in question “come nowhere close to that standard.”
Disney’s lawsuit alleges that DeSantis “orchestrated at every step” a campaign to punish the company for speaking out against a Florida bill limiting classroom discussion of sexual orientation or gender identity. That alleged scheme now threatens the company’s business, Disney alleges.
“The case that we filed last month made our position and the facts very clear,” Disney CEO Bob Iger said during the company’s earnings call earlier this month. “And that’s really that this is about one thing and one thing only and that’s retaliating against us for taking a position about pending legislation.”

The effort to remove Walker as the judge in Disney’s civil case in U.S. District Court in Tallahassee, Florida, came days before DeSantis launched his 2024 presidential campaign. The governor, who is seen as former President Donald Trump’s main competition for the GOP nomination, has gained a national profile for engaging in numerous political battles.
The long-running fight between the ambitious politician and one of his state’s top employers spilled into the courts after the governor’s handpicked officials voted to cancel Disney’s development deals for its Orlando-area parks.
Disney filed its suit in late April after the new board of its special district voted to undo development contracts that the company said it struck to secure its investments. The company has since updated that lawsuit to include newly passed legislation targeting its monorail system as further evidence of retaliation by the governor.
DeSantis’ next volley was to move to have Walker replaced. Walker was nominated to serve as judge for the United States District Court for the Northern District of Florida in 2012 by then-President Barack Obama.
In 2018, Walker ruled against the state and ordered then-Governor Rick Scott to restore voting rights of felons after their release from prison.
That same year, he ordered the Florida Department of Corrections to continue providing a transgender woman prisoner with hormone treatment and to provide her with women’s undergarments and grooming products. The prisoner, who was diagnosed with gender dysphoria, was housed in a male-only correctional facility.
Representatives for DeSantis did not immediately respond to CNBC’s request for comment. More

Disney is set to invest $17 billion in Florida over the next decade, including the creation of 13,000 jobs.
The company reiterated its commitment to the state despite ongoing tensions with Gov. Ron DeSantis.
The $17 billion investment includes the ongoing transformation of Epcot, the revamp of Splash Mountain and a number of “blue sky” park plans.

Handout | Getty Images Entertainment | Getty Images

Despite its battle with Gov. Ron DeSantis, Disney remains committed to the state of Florida.
The media and theme park juggernaut is set to invest $17 billion in central Florida’s Walt Disney World hub over the next decade, which includes the potential creation of 13,000 jobs.

Those figures have been repeated by CEO Bob Iger and parks chief Josh D’Amaro over the past few months, as tensions between Disney and Florida lawmakers have continued to ratchet up. The fight has taken on even more significance now that DeSantis is officially running for president.
In April, the company filed a lawsuit accusing DeSantis and the new board members of its special district of carrying out a campaign of political retribution against the entertainment giant.
DeSantis targeted Disney’s special district, formerly called the Reedy Creek Improvement District, after the company publicly criticized a controversial Florida bill — dubbed “Don’t Say Gay” by critics — that limits discussion of sexual orientation and gender identity in classrooms.
“We never wanted, and we certainly never expected, to be in the position of having to defend our business interests in federal court, particularly having such a terrific relationship with the state as we’ve had for more than 50 years,” Iger said during the company’s earnings call earlier this month.
Disney recently scrapped plans to open up a new employee campus in Lake Nona, Florida, citing “changing business conditions.” This means the company also will no longer be asking more than 2,000 California-based employees to relocate to Florida. That location was not part of Disney’s $17 billion investment plan.

D’Amaro, who runs Disney’s parks, experiences and consumer products division, reiterated Iger’s sentiments earlier this week during the J.P. Morgan Global Technology, Media and Communications Conference. He told audience members that the $17 billion investment “gives you a sense of how aggressive we’re being in Walt Disney World.”
“And this includes things like the transformation of Epcot,” he explained. “It includes things like there’s a new Star Tours attraction coming, we have a new Tiana attraction that’s coming. So, we’re thinking pretty aggressively about where we can take things in Florida.”
Already Epcot opened Remy’s Ratatouille Adventure in the France pavilion in late October and also last year unveiled Guardians of the Galaxy: Cosmic Rewind, a roller coaster in the Wonders of Xandar Pavilion, based on the fictional planet from the Marvel Cinematic Universe. The park also has a new restaurant called Space 220.
Still to come to the park is the “Moana”-themed park area called The Journey of Water, a self-guided outdoor trail where guests can play and interact with water. It’s set to open in late 2023.

At Disney World’s Hollywood Studios, as well as at the California-based Disneyland and Disneyland Paris, the company is set to add more stories and characters to its Star Tours attraction. Additionally, it is updating Splash Mountain at both domestic resorts with a “Princess and the Frog” theme.
The company is also updating several of its hotel and resort locations in Florida.
D’Amaro added that the $17 billion figure for Florida also includes some of the “blue sky” ideas the company presented last year during its D23 Expo in Anaheim, California. These projects are still in early development and may not see the light of day.
During that presentation last September, D’Amaro talked about the possibility of revamping Dino Land at Animal Kingdom in Orlando. Initial ideas for the space include the possibility of bringing “Zootopia” to the park, including its variety of districts and animal species, or even “Moana.”
At Magic Kingdom, Disney is asking the question: “What is behind Big Thunder Mountain?” The company teased that an area based on “Coco” could be in that location or “Encanto.” Perhaps both.
D’Amaro even hinted at the possibility of bringing to life an area of Magic Kingdom overrun by Disney villains.
Price points will vary for these projects, if they do come to fruition, but for reference, the two Star Wars: Galaxy Edge lands in Disneyland and Disney World are estimated to have cost $1 billion each.
Disney’s theme parks have been a bright spot for the company, as guest visitation has rebounded significantly in the months following the pandemic shutdowns. The parks, experiences and products divisions saw a 17% year-over-year revenue increase to $7.7 billion during the most recent quarter.
Around $5.5 billion of that revenue came from its theme park locations. The company said guests spent more time and money during the quarter visiting its parks, hotels and cruises both domestically and internationally. Its cruise business, in particular, saw an increase in passenger cruise days.
“We see this business as a key growth driver for the company,” Iger said during Disney’s recent earnings call. More

Gap, which runs its eponymous brand as well as Banana Republic, Old Navy and Athleta, saw its gross margins improve thanks to reduced promotions and lower air freight expenses.
The mall retailer’s fiscal first-quarter revenue was largely in line with expectations.
The company’s net losses have narrowed but all four of its brands reported declining sales again.

The Gap logo is displayed at a Gap store on April 25, 2023 in Los Angeles, California.
Mario Tama | Getty Images

Gap reported another quarter of net losses and declining sales across its four brands but the retailer insisted it’s making progress — and has managed to significantly improve its margins, which sent shares surging in extended trading.
Here’s how the apparel retailer did in its fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

Earnings per share: 1 cent, adjusted, vs. a loss of 16 cents, expected
Revenue: $3.28 billion vs. $3.29 billion expected

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For the three-month period that ended April 29, the company’s net loss narrowed to $18 million, or 5 cents per share, from $162 million, or 44 cents a share, in the year-earlier period. On an adjusted basis, the company reported earnings of $3 million, or 1 cent per share. 
Sales dropped to $3.28 billion, down 6% from $3.48 billion a year earlier. 
Shares jumped more than 15% in after-hours trading on the improvement in gross margins.
Gap, which includes its namesake brand, Old Navy, Banana Republic and Athleta, has been without a CEO for nearly a year as it worked to restructure the business, understand its customers better and get back to profitability. 
The retailer said that work is well underway — and acknowledged it has long been needed.

“Consistent with what you’ve heard from us over the last few quarters, we continue to take the necessary actions to drive critical change at Gap Inc., to further improve the trajectory of our business and to get us back on a path to delivering consistent results,” interim CEO Bobby Martin told investors on an earnings call.
“I understand that we have surfaced these issues before, and what I would say is simply this work has been derailed for far too long and it is imperative that we get after it in earnest,” he said.
Last month, Gap told investors it will lay off about 1,800 employees, more than three times as many as the 500 layoffs it announced in September, as part of a broad effort to cut costs and streamline operations.
Between this year and last, the company has cut 25% of its headquarters roles, which has increased the number of direct reports each manager has from two to four and reduced management layers from 12 to eight, the company said. 
The cuts remove layers of red tape and bureaucracy that will allow Gap to be more nimble in its decision-making and focused on its creative efforts, the company said. 
In March, it also announced a major leadership shake-up. Athleta CEO Mary Beth Laughton left the company and its chief growth officer role was eliminated. Gap announced its chief people officer Sheila Peters would also be leaving, albeit at the end of the year. 
During an earnings call with investors, Martin said the search for a new CEO continues, but he didn’t share a timeline of when the job would be filled.
“When I took the role of interim CEO in July, I did not expect to still be speaking to you in our first-quarter earnings call,” said Martin. “But this only underscores how strongly the board is committed to appointing the right person as our next CEO, one that has passion, strong vision and customer obsession that will take this company forward.”
Martin said previously the next chief executive will be an external candidate.
In its most recent quarter, comparable sales were down 3% and store sales decreased 4% compared to last year. 
Online sales, which represented 37% of total net sales, also dropped 9% year over year, but the company said that was due to the fact that sales trends are getting more in line with pre-pandemic metrics. But digital sales are up 39% compared to the fiscal first quarter of 2019, the company added. 
In the year-earlier period, many retailers were still battling pandemic-related supply chain issues and it landed Gap with a glut of inventory the company had trouble selling because it was out of season or out of style. 
Gap, like other retailers, relied on promotions to clear that inventory, particularly at Old Navy, but in its most recent quarter, it was able to hold the line on discounts — and benefit from reduced air freight expenses that have led to better margins for retailers across the industry. 
Gross margins increased by 5.6 percentage points year over year to 37.1%, and improved on the prior quarter, too, when margins were 33.6%. 
The company attributed the bump in margins to lower air freight expenses and a slowdown in discounting, which was partially offset by ongoing inflationary costs. 

How Gap’s brands fared

Old Navy, which accounts for the majority of Gap’s revenue, saw net sales drop 1% to $1.8 billion and comparable sales down 1%. Sales were strong in its women’s and baby categories, but the gains were offset by softness in active and kids and an ongoing slowdown in consumer demand. Old Navy, which caters to a lower-income consumer, is more vulnerable to macroeconomic conditions. 

Gap reported $692 million in sales, a 13% drop year over year, and a 1% increase in comparable sales. Similar to Old Navy, the eponymous banner also saw strength in its women and baby categories, and softness in activewear and kids. Sales were also affected by Gap store closures, the company said. 

Banana Republic saw $432 million in sales, down 10% year over year. The company attributed the drop to an “outsized” 24% jump in sales in the year-ago period that was driven by a shift in consumer preferences as many returned to work and going out following Covid lockdowns. Comparable sales were down 8%.

Athleta is still missing the mark when it comes to what consumers are looking for. Net sales were down to $321 million, an 11% drop year over year, and comparable sales were off 13%. The sales dip was attributed to ongoing product acceptance challenges, including “misses” in color, print, pattern, silhouette and straying away from the brand’s “performance DNA.”

Gap is also continuing to improve its inventory levels, which were down 27% in the quarter at $2.3 billion compared to a year ago. 
The company is still having promotions and discounts, but they’re not denting margins like they were now that the inventory is cleaned up, said Gap finance chief Katrina O’Connell.
“The reduction in inventory has really allowed us to clean up the markdown piece of the business, which doesn’t add a lot of customer value, right? That’s just inventory that last year wasn’t responded to well by the consumer and we had to sell through given excess inventory, the wrong inventory,” O’Connell said on an earnings call.
“The margin benefits coming from cleaning up that markdown, what that’s allowing us to do is still promote, which is a better way to be offering value to the consumer, which is still important at this time.”
Across its brands, Gap has been conducting research to better understand its consumers so it can deliver products they want, regain market share and reverse the sales slumps.
Gap’s full-year outlook was largely unchanged from the forecast it gave in March. The company is expecting second-quarter net sales to decrease in the mid- to high single-digit range. 
For the full year, it continues to expect net sales to be down in the low to mid-single-digit range.
The outlook is partly affected by the company’s sale of Gap China. In the fiscal second quarter of 2022, net sales included $60 million from Gap China, and in fiscal 2022, it included $300 million in sales. 
Fiscal 2023 will also include a 53rd week, which is expected to boost sales by $150 million.
Gap expects gross margin to continue to rise and capital expenditures to come down to $500 million to $525 million, compared to a prior range of $500 million to $550 million. The drop is driven by a decision to open about five fewer Old Navy and Athleta stores during the fiscal year. 
The company plans to open a net 25 to 30 Old Navy and Athleta stores in the fiscal year, a third of which will be Old Navy. It expects to close 50 to 55 Gap and Banana Republic outposts, more than half of which will be Gap.
Read the full earnings release. More

Ford Motor will partner with Tesla on charging initiatives for its current and future electric vehicles in an unusual tie-up between the two rivals.
Under the agreement, announced by Ford CEO Jim Farley and Tesla CEO Elon Musk, current Ford owners will be granted access to more than 12,000 Tesla Superchargers across the U.S. and Canada starting early next year.
Ford’s next-generation of EVs will include Tesla’s charging plug, allowing owners of Ford vehicles to charge at Tesla Superchargers without an adapter.

Jim Farley and Elon Musk
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DETROIT – Ford Motor will partner with Tesla on charging initiatives for its current and future electric vehicles in an unusual tie-up between the two rivals, CEOs of the automakers announced Thursday.
Under the agreement current Ford owners will be granted access to more than 12,000 Tesla Superchargers across the U.S. and Canada, starting early next year, via the use of an adapter. And, Ford’s next-generation of EVs — expected by mid-decade — will include Tesla’s charging plug, allowing owners of Ford vehicles to charge at Tesla Superchargers without an adapter, making Ford among the first automakers to explicitly tie into the network.

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The initiatives were announced by Ford CEO Jim Farley and Tesla CEO Elon Musk during a live, audio discussion on Twitter Spaces. They come as Ford attempts to ramp up production of its fully electric vehicles in an attempt to catch up to — or someday surpass — Tesla’s sales in the segment.
While Tesla still dominates the EV sector by far, Ford came in second in fully electric vehicle sales in the U.S. last year, notching sales of 61,575 electric vehicles.
Farley said the company is “totally committed” to a single U.S. charging protocol that includes the Tesla plug port, known as NACS. It’s unclear if Ford’s next-gen EVs will maintain the charging ports featured on current models, known as CCS. A Ford spokesman said the company has “this option available to us but have no news to share today.”
A separate Ford spokesman told CNBC that pricing for charging “will be competitive in the marketplace.” The companies will disclose further details closer to a launch date anticipated in 2024.
Tesla previously discussed opening its private network to other EVs. White House officials announced in February that Tesla committed to open up 7,500 of its charging stations by the end of 2024 to non-Tesla EV drivers. Previously the company’s chargers in the U.S. were mostly used by and made to be compatible with Tesla’s EVs.

In Tesla’s first-quarter shareholder deck, the company disclosed that it has roughly 45,000 Supercharger connectors worldwide at 4,947 Supercharger Stations. The company does not disclose chargers by country or revenue from the devices. It includes revenue from its Supercharging stations under a “services and other” segment.
The Twitter Spaces event between Farley and Musk Thursday marks the latest interaction between the two executives, who have a unique rivalry. They have each expressed admiration for the other, despite their companies competing directly.
Ford notably beat Tesla to the pickup segment beginning production of its F-150 Lightning, the electric version of its consistently popular trucks, in April 2022. Ford also heavily benchmarked the Tesla Model Y for its Mustang Mach-E crossover and followed Tesla in price cuts of the electric crossovers.
But Musk, who leads Tesla, SpaceX and Twitter, has repeatedly praised Ford as a historic American company, lauding its ability to avoid bankruptcy, unlike its crosstown rivals General Motors and Chrysler during the Great Recession.
Such flattery was prevalent during the Thursday call: “Working with Elon and his team, I’m really excited for our industry and for the Ford customers,” Farley said. Musk later reciprocated the feelings: “It’s an honor to be working with a great company like Ford,” he said.
Farley prodded Musk a bit, asking about the long-delayed new version of the company’s first vehicle, the Roadster. Musk teased a Roadster refresh back in the fall of 2017. He promised it would have a 620-mile range per charge and three motors, among other features.
Today, he reiterated Thursday, the new version of the Roadster is still not even completely designed.
Earlier Thursday, Farley commended Tesla on its charging network during a Morgan Stanley conference, saying that while Ford has created its own charging products for its commercial customers, automakers should consider collaborating on charging infrastructure for the general public.
“It seems totally ridiculous that we have an infrastructure problem, and we can’t even agree on what plug to use,” Farley said, noting that Tesla’s charging plug is different from that used by other automakers. “I think the first step is to work together in a way we haven’t, probably with the new EV brands and the traditional auto companies.” More