Disney’s streaming business gets closer to becoming profitable

In Disney's Q2 2023 earnings report, released on Tuesday, February 7, 2023, the media conglomerate announced that its two major streaming platforms, Disney+ and Hulu, had collectively generated their first-ever profit. The combined revenue for these services amounted to $5.5 billion, leading to an operating income of $47 million. This represents a significant improvement from the same quarter last year when Disney reported a combined operating loss of $587 million for Disney+ and Hulu.

Disney+, which was launched in November 2019, has been rapidly gaining subscribers with its extensive library of content from Disney, Pixar, Marvel, Star Wars, National Geographic, and more. As of the end of Q2 2023, Disney+ had approximately 137.7 million subscribers worldwide. Hulu, which is owned by Disney and offers a more adult-oriented content library, had around 41.6 million subscribers in the US as of Q3 2022.

However, not all was positive in Disney's streaming division. ESPN+, Disney's sports-focused streaming service, continued to post losses, reporting an operating loss of $65 million in Q2 2023. This brought the total operating loss for Disney's streaming segment down to $18 million. Despite this setback, the narrowing losses mark an essential milestone for Disney as it continues to invest heavily in its streaming business to compete with industry giants like Netflix and Amazon Prime Video.

Disney's CEO, Bob Chapek, expressed his satisfaction with the progress of the streaming business during the earnings call, stating, "We're very pleased with the continued growth of our DTC [Direct-to-Consumer] segment, which is now generating positive operating income." He also highlighted the importance of the streaming business in the company's overall growth strategy, saying, "We're investing in content and technology to ensure we continue to lead in this space."

The positive financial results from Disney's streaming segment were not the only highlights from the earnings report. The company also reported strong revenue growth in its theme parks segment, which was significantly impacted by the pandemic in the previous year. Additionally, Disney's media networks segment, which includes ESPN and ABC, saw an increase in revenue due to higher advertising sales. Overall, Disney's total revenue for Q2 2023 was $21.5 billion, up from $17.3 billion in the same quarter last year.

In conclusion, Disney's Q2 2023 earnings report marked an essential milestone as its streaming services, Disney+ and Hulu, generated their first-ever profit, while ESPN+ continued to post losses. Despite this, the narrowing losses represent an important step forward as Disney continues to invest in its streaming business and compete in the ever-evolving media landscape.