Disney hits streaming profit a bit earlier than expected

Amid increasing pressure by Wall Street for streaming in general to start showing more positive financials, Disney managed to not only hit that mark, but did so ahead of its own projections.

The company, which operates Disney+, ESPN+ and Hulu in the U.S., had been targeting this sector to become profitable in the fiscal fourth quarter of 2024.

It managed to beat those expectations, as announced when it unveiled its third quarter results Aug. 7, 2024.

That said, Disney+ and Hulu both lost $19 million despite bringing in $5.8 billion in revenue, but ESPN+’s strong performance managed to erase those losses, booking $47 million operating income on $6.38 billion in revenue.

The company said it expects Disney+ and Hulu to head into black in the next quarter.

That’s compared to losing $512 million a year ago.

Disney saw a  bump from 117.6 to 118.3 consumers across its domestic and international streamers, exclusive Hotstar) over the same period in 2023.

Media companies with streaming offerings have long focused more on subscriber growth, often investing heavily in content production and licensing along with marketing and advertising. 

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Investors appeared to be at least somewhat patient as streamers focused on that aspect of their business, but there have been increasing calls to focus more on profit.

To that end, most streamers, including Disney, have cut back spending on producing original content. In a high profile move, Disney removed hundreds of “low performing” series and films from its streaming library in order to be able to remove licensing fees from its books.

At least some streamers have been asking for budgets on originals be reigned in and are also ordering less content, though spending on big-name tentpole titles has remained relatively strong.

Streamers have also been looking to bundling as a way to deliver better value and decrease churn. 

Separately, Disney’s ESPN is also getting ready to launch sports-focused streamer Venu Sports with Warner Bros. Discovery and Fox.