Star Wars Trilogy Gives Hope After Earnings Miss by Disney

On Thursday, the force behind Star Wars helped lift shares of Walt Disney as the promise of the film trilogy was able to overshadow the disappointing results for the quarter and struggles at the television business of the media company.

The theme park operator and movie studio is grappling with dropping number of viewers who choose to abandon current top cable networks. A big reason many of its investors remain with it despite it being challenging, is the power of its brands and characters.

Shares of Disney were up over 1% after CEO Bog Iger said the company entered into a deal with Rian Johnson the director of the upcoming Star Wars: The Last Jedi film, to create a trilogy for the blockbuster Sci-fi fiction series.

A live-action television series of Star Wars is also being developed to be streamed on a streaming service Disney will launch to capture audiences online, said Iger.

Shares of Disney were up 1% from their closing price on Thursday after the announcement about Star Wars, which helped to reverse an initial drop after results from Disney raised concerns about subscriptions with the cable giant.

Subscribers as well as advertising revenue dropped at ESPN, the powerhouse for sports that many see as a proxy for the ability of Disney to fight rapidly growing migration of cable subscribers to viewing online.

Affiliate revenue was up and its overall results for ESPN ended comparable to the previous year for the same quarter ending during September.

Total revenue at the cable business of Disney, its largest unit that includes the Disney Channel and ESPN, fell slightly to just over $3.95 billion for its fiscal fourth quarter, missing expectations of $4.06 billion on Wall Street.

To address the challenges for its television networks business, Disney currently is developing a streaming service that is family friendly that it plans to sell directly to the consumer to compete with business such as Netflix.

New releases by Disney will go to its own service instead of places like Netflix, beginning in 2018, and Iger said on Thursday, the new service is to be priced significantly below that of Netflix prices, a reflection of not having the same amount of content.

The sports focused Disney service will launch early in 2018 and will be known as ESPN Plus.

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