Disney Plus and Hulu have achieved a significant milestone by posting a profit for the first time. In the recent earnings report released by Disney, it was revealed that both streaming services collectively made $47 million this past quarter. This marks a substantial turnaround from the $587 million loss reported at the same time last year. However, the success of Disney and Hulu’s profit was overshadowed by ESPN Plus, which still incurred a loss of $65 million, resulting in a combined streaming earnings deficit of $18 million.
Despite ESPN Plus dragging down the overall profitability of Disney’s streaming business, the company remains optimistic about the future. Disney CEO Bob Iger expressed confidence in the trajectory of the streaming business, stating that they anticipate it to become profitable in the fourth quarter of this year. This strategic decision to invest more in streaming has paid off, with the company seeing a narrowing of losses and reaching a significant milestone.
Over the past few months, Disney Plus has added 7.9 million subscribers in the US and Canada, bringing the total subscriber count to 54 million. The launch of the combined Disney Plus and Hulu app in March has been a success, and now plans are underway to integrate ESPN Plus into the app as well. This move will offer all subscribers access to select live games and studio programming within the app, further enhancing the streaming experience.
One factor that may have contributed to the turnaround of Disney’s streaming business is the growth of its ad-supported tier. The introduction of a $7.99 per month option in December 2022 has been well-received, with the company nudging subscribers towards this tier. The partnership with cable provider Charter has also played a significant role in driving the growth of the ad-supported tier, which now boasts 22.5 million subscribers.
Disney is looking towards the future with plans to launch a standalone ESPN streaming service in the fall of 2025, along with a dedicated sports streaming service in collaboration with Warner Bros. Discovery and Fox later this year. These strategic moves highlight Disney’s commitment to expanding its streaming offerings and solidifying its position in the competitive streaming market.
While Disney and Hulu have made great strides in achieving profitability, there are still challenges to overcome, particularly with ESPN Plus. However, with a continued focus on investment, subscriber growth, and strategic partnerships, Disney is well-positioned to capitalize on the growing demand for streaming services and emerge as a strong player in the industry.
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