2015 was a great year for movies, more precisely it was a great year for Hollywood. Several mega blockbusters have dominated the box office this year, and with help from Star Wars: The Force Awakens at the last moment, the North American box office totals for the year have topped $11 billion, passing the previous record set in 2013.
Together with Star Wars, other beloved franchises were breaking box office records this year, including, Avengers: Age of Ultron, and Pixar’s Inside Out, all under Disney’s (NYSE:DIS), as well as Jurassic World and Furious 7, under Universal Studios, who’s parent company is Comcast Corporation (NASDAQ:CMCSA).
Despite the success in the film industry, the parent companies of the studios, Disney and Comcast, showed a very mixed performance over the year, and traditional cable television is to blame. Disney’s diversified portfolio of franchises didn’t change the fact that ESPN is a heavy burden. ESPN lost three million subscribers this year. ESPN is very vulnerable to Millennial cord-cutting.
Comcast, as a company that gets most of its earnings from television has to the deal with the same issue.
Disney and Comcast, as well as others, are going to have to deal with the fact that paying hundreds of dollars every month for a cable package of hundreds of channels, most of which will never be watched, doesn’t make sense financially.
ESPN has already fired 300 employees, nearly 4% of the network's global workforce, trying to reduce its budget for 2016. But firing people will not be enough long term, Disney will have to change ESPN's business model. It will be intresting to see the events unfold in 2016.