Disney’s Streaming Business Achieves Profitability for First Time Since Launch
Disney’s streaming business has reached profitability for the first time since launching Disney+ in late 2019. The milestone was achieved earlier than expected, thanks to cost-cutting efforts and the popularity of Hulu programs like “Shogun” and “The Bear.” Despite losing over $11 billion since its inception, Disney took measures to reduce costs and increase prices in order to achieve profitability. In the second fiscal quarter, the streaming unit earned $47 million, a significant improvement from the $587 million loss a year earlier.
Disney’s Chief Financial Officer, Hugh Johnston, expressed satisfaction at crossing the profitability threshold ahead of schedule. The streaming business is expected to face losses in the current quarter due to Disney+ Hotstar in India but aims to return to profitability in the fall, with further improvements expected next year. The company reported a $20 million net loss for the quarter, primarily due to goodwill impairments, but saw adjusted earnings of $1.21 per share, a 30% increase from the previous year.
The strong results were credited to Disney’s experiences division, particularly the success of theme parks outside the US, such as Shanghai Disney. CEO Bob Iger highlighted strategic investments in the experiences business to drive growth. The earnings report was released following Iger’s successful defense against a proxy challenge from Nelson Peltz of Trian Partners, who was seeking board seats. Iger emphasized that the company’s turnaround and growth initiatives have continued to produce positive outcomes.
Upcoming releases from Disney’s movie studios will test Iger’s plan to revitalize the division. Despite challenges, Disney remains focused on driving growth and delivering compelling content to audiences worldwide.