The recent earnings report from Disney revealed a significant milestone for the company as both Disney Plus and Hulu posted a profit for the first time. The combined earnings totaled $47 million this past quarter, marking a stark contrast from the $587 million loss reported at the same time last year. However, it’s important to note that ESPN Plus still saw a loss of $65 million, resulting in a combined streaming earnings deficit of $18 million. Despite this setback, Disney remains optimistic about the future of its streaming business.
Disney Plus has seen substantial growth in the past few months, adding 7.9 million subscribers in the US and Canada alone, bringing the total subscriber count to 54 million. The recent launch of the combined Disney Plus and Hulu app in March is aimed at further expanding its reach. Additionally, plans are in place to integrate ESPN Plus into the app, providing all subscribers with access to select live games and studio programming.
One key factor that may have contributed to the turnaround in Disney’s streaming business is the growth of its ad-supported tier. The company introduced a $7.99 per month option in December 2022 and actively promoted it to subscribers. The strategy seems to have paid off, with the ad-supported tier ending the quarter with 22.5 million subscribers. Disney’s partnership with cable provider Charter is also cited as a driving force behind the growth of this tier.
Looking ahead, Disney is set to launch a standalone ESPN streaming service in the fall of 2025, further diversifying its streaming offerings. Additionally, a dedicated sports streaming service in collaboration with Warner Bros. Discovery and Fox is scheduled to launch later this year. These initiatives demonstrate Disney’s commitment to expanding its foothold in the competitive streaming market.
Disney’s recent profitability milestone represents a significant achievement in its streaming endeavors. While challenges remain, such as the continued losses from ESPN Plus, the company’s strategic moves and investment in new services are positioning it for a profitable future in the streaming landscape. As Disney CEO Bob Iger emphasized, streaming is expected to be a key growth driver for the company moving forward.
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