Business Boom for Disney
Disney’s combined streaming business lost just $18 million in the quarter as Charter’s new deal with the company saw subscriber growth and ARPU decline.
Disney is on the brink of a white whale in the entertainment industry: the profitability of streaming.
The company reported second-quarter earnings early Tuesday morning, saying its Disney+, Hulu and ESPN+ direct-to-consumer businesses lost just $18 million last quarter, on revenue of $6.2 billion and after shedding ESPN+. Based on this equation, the streaming entertainment business was actually profitable, with $5.6 billion in revenue and $47 million in net income.
While the company warns that the third quarter will be weaker due to changes to Disney+ Hotstar, the streaming division is expected to be fully unprofitable in the fourth quarter and will be a “significant future growth engine” thereafter.
Charter’s big deal with Disney was also a big factor in the quarter, helping Disney+ subscribers grow by more than 6 million to 117.6 million, but average revenue per subscriber fell slightly from $8.15 to $8 due to wholesale pricing. trade-related price. Similarly, Disney’s linear operating income decreased by 7% and operating profit decreased by 18%, partly due to the decision to divest Freeform, Disney Junior and other Charter channels and lower linear ratings.
Hulu added 700,000 subscribers and Hulu plus Live TV lost 100,000.
“Our results were largely driven by our Experience segment and streaming business. Importantly, entertainment streaming was profitable in the quarter and we continue to achieve profit in our combined streaming businesses in the fourth quarter.” In a statement, Disney CEO Bob Iger said
“Looking at our company as a whole, it’s clear that the turnaround and growth initiatives we launched last year have continued to deliver positive results,” he continued. “We have some highly anticipated theatrical releases coming up over the next few months; our TV shows are resonating with audiences and critics alike; ESPN continues to break ratings records as we continue to evolve into a leading digital sports platform; and we are turbocharging the growth of our Experiences business with some short and long-term strategic with investments.”
Disney’s revenue for the most recent quarter was $22.1 billion, up 1% from a year earlier. Operating profit was $3.8 billion, up 22%. Free cash flow for the quarter was $2.4 billion.
As usual, the biggest driver of the company’s finances is the entertainment division, which brought in $8.4 billion and $2.3 billion in operation. revenues
Entertainment segment revenue was $9.8 billion, down 5% from last year, but operating income was $781 million, up 72% from last year. The sports section, which is mostly ESPN, scored a 4.3. billion dollars and an operating result of 778 million dollars.
