Disney Finally Reaches Profitability in Streaming
Five years after the launch of Disney+, The Walt Disney Company’s direct-to-consumer unit has finally turned a profit.
When Bob Iger returned to the company in 2022, he made profitability in streaming a cornerstone of his strategy moving forward. The goal was to hit profitability by Q4 of 2024.
To this end, over the last two years, Disney has reeled in spending, culled programming from its streaming services, and tried to push subscribers to the ad-based versions of Disney+ and Hulu.
Photo: Disney
Last quarter, profitability in streaming finally seemed within reach. Now, Bob Iger and his team have delivered.
Disney Clears a Major Hurdle
According to the company’s Q3 earnings report, Disney’s combined direct-to-consumer business, which is made up of Disney+, Hulu, and ESPN+, saw revenue rise 15% last quarter to $6.4 billion.
Perhaps more impressively, the unit had an operating income of $47 million, compared to a loss of $512 million in Q2.
Notably, the Disney Entertainment direct-to-consumer unit (which excludes ESPN+) had an operating loss of $19 million after turning a profit for the first time last quarter.
Photo: Disney
Going forward, Disney expects its streaming business to deliver even better results in Q4. According to the company, both Disney Entertainment’s direct-to-consumer and ESPN+ are expected to be profitable. Additionally, Disney should get a boost from the planned October price increases that will come with its streaming services.
Photo: Disney
While the company wants to eventually turn streaming into a growth business, Bob Iger has made good on his promise to reach profitability. For Disney and investors that should both a sigh of relief and a reason to be excited about the future.
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