Disney Turns Streaming Losses Into Gains: A New Era for Direct-to-Consumer?
After years of financial losses and sweeping reforms, Disney’s streaming business has finally turned a profit. Under CEO Bob Iger’s leadership, the company’s direct-to-consumer segment — which includes Disney+, Hulu, and ESPN+ — has achieved profitability for two consecutive quarters, signaling a pivotal moment for the entertainment giant.
In the fiscal fourth quarter, Disney’s streaming operations reported an operating income of $321 million, a significant improvement from the $387 million loss recorded in the same period last year. For the full fiscal year, the division posted a $134 million profit, compared to a $2.6 billion loss in 2023. Disney+ also saw subscriber growth, adding 4.4 million accounts to reach 120 million globally by the end of Q4.
This turnaround comes after a challenging year for Disney, which faced pressure from activist shareholder Nelson Peltz to outline a clear path to profitability. Iger’s strategy, which included price increases, staff cuts and cost reductions, has begun to pay off. Disney’s stock has risen 25% in 2024, although it remains below its peak earlier this year.
The company’s success wasn’t limited to streaming. Blockbuster films like Deadpool & Wolverine and Inside Out 2 contributed to strong performance from Disney’s film studios. Despite this momentum, challenges remain in other areas. Revenue from Disney’s traditional TV networks fell 6% to $2.5 billion in Q4, with profits from the segment dropping 38%. ESPN, categorized under the company’s sports segment, saw a 6% decline in profit despite a 1% revenue increase.
On last week’s earnings call, Disney executives expressed confidence in the company’s trajectory, citing advancements in streaming technology, anti-password sharing measures, and improved personalization. CFO Hugh Johnston stated: “We wouldn’t have given you the guidance we did if we didn’t have confidence in delivering”.
Looking ahead, Disney projected double-digit adjusted earnings per share growth by 2027. This ambitious forecast extends beyond Iger’s tenure, as he plans to step down before the end of 2026. The succession process is underway, with Morgan Stanley’s outgoing chairman James P. Gorman set to lead the search for Iger’s replacement for the beginning of 2026.
While risks remain — ranging from competition with Universal’s Epic Universe park to high-stakes film releases like Captain America: Brave New World and The Fantastic Four: First Steps — Disney’s renewed focus on streaming profitability suggests the company is well-positioned for its next chapter.
With Netflix generating billions in profit and Spotify nearing full-year profitability, Disney’s results are part of a broader resurgence in streaming. For the first time in years, the Burbank-based media giant seems ready to compete on a level playing field in this rapidly evolving market.
Source: LA Times
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After years of financial losses and sweeping reforms, Disney’s streaming business has finally turned a profit. Under CEO Bob Iger’s leadership, the company’s direct-to-consumer segment — which includes Disney+, Hulu, and ESPN+ — has achieved profitability for two consecutive quarters, signaling a pivotal moment for the entertainment giant.
In the fiscal fourth quarter, Disney’s streaming operations reported an operating income of $321 million, a significant improvement from the $387 million loss recorded in the same period last year. For the full fiscal year, the division posted a $134 million profit, compared to a $2.6 billion loss in 2023. Disney+ also saw subscriber growth, adding 4.4 million accounts to reach 120 million globally by the end of Q4.
This turnaround comes after a challenging year for Disney, which faced pressure from activist shareholder Nelson Peltz to outline a clear path to profitability. Iger’s strategy, which included price increases, staff cuts and cost reductions, has begun to pay off. Disney’s stock has risen 25% in 2024, although it remains below its peak earlier this year.
The company’s success wasn’t limited to streaming. Blockbuster films like Deadpool & Wolverine and Inside Out 2 contributed to strong performance from Disney’s film studios. Despite this momentum, challenges remain in other areas. Revenue from Disney’s traditional TV networks fell 6% to $2.5 billion in Q4, with profits from the segment dropping 38%. ESPN, categorized under the company’s sports segment, saw a 6% decline in profit despite a 1% revenue increase.
On last week’s earnings call, Disney executives expressed confidence in the company’s trajectory, citing advancements in streaming technology, anti-password sharing measures, and improved personalization. CFO Hugh Johnston stated: “We wouldn’t have given you the guidance we did if we didn’t have confidence in delivering”.
Looking ahead, Disney projected double-digit adjusted earnings per share growth by 2027. This ambitious forecast extends beyond Iger’s tenure, as he plans to step down before the end of 2026. The succession process is underway, with Morgan Stanley’s outgoing chairman James P. Gorman set to lead the search for Iger’s replacement for the beginning of 2026.
While risks remain — ranging from competition with Universal’s Epic Universe park to high-stakes film releases like Captain America: Brave New World and The Fantastic Four: First Steps — Disney’s renewed focus on streaming profitability suggests the company is well-positioned for its next chapter.
With Netflix generating billions in profit and Spotify nearing full-year profitability, Disney’s results are part of a broader resurgence in streaming. For the first time in years, the Burbank-based media giant seems ready to compete on a level playing field in this rapidly evolving market.
Source: LA Times
Share:
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