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Disney Hits Revenue Milestone For Streaming Division
The Walt Disney Company exhibited details of its Disney+ streaming service at a Disney expo in August. The service goes live Nov. 12.
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Jesse Grant
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Getty Images for Disney
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Topline:
Disney reported quarterly earnings on Tuesday, growing revenue in the quarter to $22.1 billion. It also achieved its first-ever profit in its Disney Streaming division (minus ESPN+).
Why it matters: Disney is the bellwether for the overall health of the traditional studio system headquartered in Los Angeles. Its progress in transitioning to digital, direct-to-consumer services indicates how well that shift is progressing.
The streaming good news: Disney+ added 8 million U.S. subscribers between January and March 2024, the highest growth since its launch. The Disney Streaming division, which does not include ESPN+, reported a $47 million profit in the quarter, a first. If one includes the sports streamer, that number swings to an $18 million loss. Disney achieved this milestone with a mix of price hikes and spending cuts. It only launched a couple of new series and debuted Taylor Swift’s concert movie.
The linear TV bad news: Revenue dropped 8% for the quarter and profitability dipped 22%. Cord-cutting and lower ad revenue contributed to this decline.
Is streaming’s growth outpacing linear’s losses?: Technically yes. First quarter linear TV losses were $234 million year over year, but streaming was up $659 million. But when you consider profitability, operating income for linear is still more than $750 million while streaming, as noted above, generated $47 million. So that presents a more complex picture.
What to watch next: Disney executives warned that the path to consistent profitability in the company’s streaming business will be uneven. But look for a password-sharing crackdown later this year and potentially more price hikes to put Disney’s streaming business on surer footing.
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