The Walt Disney Company (DIS)’s streaming loss narrowed significantly in the quarter ended December, the company reported yesterday (Feb. 7), thanks to October’s price increases in Hulu, Disney+ and ESPN+. Despite a decline in streaming subscribers in the last three months of 2023, CEO Bob Iger suggested the upcoming exclusive streaming of Taylor Swift‘s concert film, Taylor Swift: The Eras Tour, and other improvements to Disney’s streaming offerings will bring subscribers back.
In the December quarter, Disney’s direct-to-consumer (DTC) sector, which includes all of its streaming services, narrowed to $138 million from $984 million in the same period in 2022. The company said its DTC services are on track to turn a profit by the fourth fiscal quarter of this year, which ends in September.
“We have never been more confident about our path to creating a strong and sustainable streaming business,” Disney’s chief financial officer Hugh Johnston told analysts on a call yesterday, “with growing subscribers over the long term and, ultimately, double-digit operating margins, a business which we fully expect to be a key earnings growth driver for the company.”
Disney reported a total revenue of $23.5 billion for the December quarter, , which is on par with the prior year. Net earnings came at $1.22 per share, beating analysts’ estimate of $0.99. Disney shares jumped more than 11 percent today.
A series of changes are coming to Disney’s streaming services. In March, Hulu and Disney+ will officially be a joint streaming service called Hulu on Disney+. The bundle is currently available in beta. CEO Iger said ESPN as a standalone brand will join this one-app experience in some capacity in 2025.
“That will be a very immersive…sports-centric app, which will have features that this combination with Fox and with Time Warner Discovery will not have, such as integrated betting, integrated fantasy, likely to have some sales arm or merchandise capabilities,” Iger said about his plans for ESPN.
A day before its earnings report, Disney announced a joint venture with Warner Bros. Discovery and Fox Corp to create a live sports streaming service that will absorb Disney’s ESPN+and all of its sports channels. Competing streamers, including Amazon Prime Video and Netflix, are also investing heavily in live sports.
In the December quarter, Hulu gained 1.2 million subscribers while Disney+ lost 1.3 million. Disney said it will start enforcing password sharing in March, a move that hopefully will help bring in new subscribers.