Walt Disney Co. Reports Positive Progress in Streaming Business
Disney’s streaming services, including Disney+, Hulu, and ESPN+, have shown significant growth in revenue, bringing in a total of $6.19 billion for the second fiscal quarter of 2024. While the overall streaming business reported an operating loss of $18 million, this is a vast improvement from the $659 million loss in the same period last year.
The entertainment streaming division, consisting of Disney+ and Hulu, was able to turn a profit with an operating income of $47 million, compared to a loss of $587 million the previous year. This success is attributed to Disney’s investment in streaming, particularly in the popular Disney+ platform, which has led to billions of dollars in losses but is expected to achieve profitability by the fourth quarter of 2024.
On the other hand, Disney’s traditional TV networks are facing losses, with an 8% decrease in revenue and a 22% decrease in operating income compared to the same period last year. The company is hoping for a rebound in its film studio business with the upcoming releases of highly anticipated movies like “Kingdom of the Planet of the Apes,” “Inside Out 2,” and “Deadpool & Wolverine.”
Despite challenges in certain sectors, Disney’s “experiences” division, which includes theme parks, cruise lines, and consumer products, continues to drive profit for the company, generating $8.39 billion in revenue and a 10% increase from the previous year.
However, Disney did take a $2-billion write-down related to its Star India business, impacting the company’s overall performance. This, along with concerns from analysts and research firms about Disney’s ability to deliver consistent results in entertainment and sports sectors, has led to a downgrade in the company’s stock rating from “buy” to “hold.”
As a result, shares of Disney fell nearly 10% following the quarterly call, reaching $104.83 midday on Tuesday. Despite these challenges, Disney remains optimistic about the future of its streaming services and is working towards achieving profitability and continued success in the entertainment industry.
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