In a recent earnings report, Disney Plus and Hulu surprised analysts by posting a profit for the first time. The $47 million profit marks a significant turnaround from the $587 million loss reported at the same time last year. However, it’s important to note that ESPN Plus still contributed to losses, with a $65 million loss dragging the combined streaming earnings into the red by $18 million.
Despite the challenges faced by ESPN Plus, Disney remains optimistic about the future of its streaming business. Disney CEO Bob Iger expressed confidence during a recent call, stating that the company expects its streaming business to become profitable in the fourth quarter of this year. He highlighted the importance of the streaming business as a growth driver for the company moving forward.
Subscriber Growth
Over the past few months, Disney Plus has experienced significant growth, adding 7.9 million subscribers in the US and Canada for a total of 54 million subscribers. The company also launched a combined Disney Plus and Hulu app in March, with plans to integrate ESPN Plus into the app in the future. This move will give all subscribers access to select live games and studio programming within the app.
One key factor contributing to the turnaround of Disney’s streaming business could be the growth of its ad-supported tier. The company introduced a $7.99 per month ad-supported option in December 2022 and has been steering subscribers toward this tier ever since. Disney’s deal with cable provider Charter also played a role in driving 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 intends to launch a standalone ESPN streaming service in the fall of 2025, as well as a dedicated sports streaming service in partnership with Warner Bros. Discovery and Fox later this year. These strategic moves demonstrate Disney’s commitment to expanding its streaming offerings and capitalizing on the growing demand for online entertainment.
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