Disney Plus and Hulu have made a significant leap towards profitability, posting a combined profit of $47 million this past quarter. This marks a drastic improvement from the $587 million loss reported at the same time last year. However, ESPN Plus still lags behind, recording a loss of $65 million, resulting in a combined streaming earnings deficit of $18 million.
Despite the slight setback with ESPN Plus, Disney sees the narrowing losses as a significant milestone in its streaming business. Disney anticipates that its streaming business will become profitable in the fourth quarter of this year. Disney CEO Bob Iger expressed optimism during the earnings call, highlighting the potential of streaming as a key driver for the company’s future growth.
Within the past few months, Disney Plus has added 7.9 million subscribers in the US and Canada, bringing the total subscriber count to 54 million. The company recently launched a combined Disney Plus and Hulu app in March and is now planning to integrate ESPN Plus into the app as well. Iger announced during the earnings call that an ESPN Plus tile will be added to Disney Plus this fall, providing all subscribers with access to select live games and studio programming.
Although Disney did not specify the exact reasons behind the turnaround in its streaming business, it is speculated that the growth of its ad-supported tier played a significant role. The introduction of the $7.99 per month ad-supported option in December 2022 has been instrumental in attracting subscribers. Disney’s partnership with the cable provider Charter has also contributed to the growth of its ad-supported tier, which now boasts 22.5 million subscribers.
Looking ahead, Disney has ambitious plans for its streaming services. The company is set to launch a standalone ESPN streaming service in the fall of 2025, along with a dedicated sports streaming platform in partnership with Warner Bros. Discovery and Fox later this year. With a strong foundation in place and a growing subscriber base, Disney is poised to capitalize on the booming streaming industry and solidify its position as a key player in the market.
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