Disney’s streaming business (sans ESPN+) turns a quarterly profit

A pink-and-white logo for Walt Disney Co. appears on a screen in a room with other screens in the background.
The Walt Disney Co. name appears on a screen on the floor of the New York Stock Exchange. The Burbank media and entertainment giant is seeing big strides in its streaming business, which includes Disney+ and Hulu, as its linear TV business continues to face losses.
(Richard Drew / Associated Press)

Walt Disney Co. is making massive strides toward turning its streaming business profitable, a milestone that comes none too soon as its traditional TV networks continue to decline.

The Burbank media and entertainment giant reported overall streaming business revenue of $6.19 billion for its fiscal second quarter of 2024, up 12% compared with a year earlier. Disney’s streaming business — which includes Disney+, Hulu and ESPN+ — reported an operating loss of $18 million for the three-month period that ended March 30, compared with a $659-million operating loss in the same period last year.

The company’s “entertainment streaming” business, which consists only of Disney+ and Hulu (and not ESPN+), was profitable for the quarter, notching operating income of $47 million, compared with a loss of $587 million a year earlier. Excluding ESPN+, streaming revenue of $5.64 billion was up 13% from a year earlier.


Overall, Disney generated $22.1 billion in revenue that quarter, up 1% from the same period a year earlier. Sales came in roughly in line with analysts’ estimates, according to FactSet. Earnings, excluding certain items, were $1.21 per share, up from 93 cents a year earlier and better than the $1.10 that analysts had predicted, on average.

Disney Chief Executive Bob Iger noted the growth in streaming in a statement, saying that the business, in addition to the company’s continued strength in experiences, which includes its amusement parks, drove the company’s second-quarter performance.

Disney’s investment in streaming, which accelerated to grow the Disney+ service that launched in 2019, has lost billions of dollars to date. The company expects its combined streaming operations to finally turn a profit in the fiscal fourth quarter of 2024.

This marks Disney’s first quarterly earnings report since Iger trounced activist investor Nelson Peltz in a proxy fight, in which Peltz had sought a board seat. Investors, in a vote tallied at Disney’s annual shareholder meeting in April, decisively rejected Peltz’s bid.

Peltz, among other things, had demanded that Disney show a realistic plan for Netflix-like profit margins in the costly streaming business. To get Disney closer to its profitability goals, Iger oversaw a severe cost-cutting plan, eliminating more than 8,000 jobs.

“Looking at our company as a whole, it’s clear that the turnaround and growth initiatives we set in motion last year have continued to yield positive results,” Iger said in a statement.


Although Disney’s streaming business was a bright spot for its entertainment segment, the company’s linear TV business struggled in the quarter, reporting $2.77 billion in revenue, a decrease of 8% compared with a year earlier. The linear networks reported operating income of $752 million, down about 22% from the same period last year.

The company said its losses in linear networks stemmed from lower affiliate revenue because of a decrease in subscribers after cable giant Charter Communications’ Spectrum service dropped from its lineup eight networks, including Freeform and Disney Junior, as part of Disney’s new cable licensing agreement with Charter. Those negotiations resulted in a more than 10-day blackout of ESPN and ABC channels as Disney and Charter hashed out an agreement.

The company’s film studio business also struggled, with revenue falling 40% to $1.39 billion for an operating loss of $18 million. Disney posted weak box-office results compared with a year earlier, when it had Marvel’s “Ant-Man and the Wasp: Quantumania” and “Avatar: The Way of Water.”

Disney movies have had a weak run in 2024 and the company is hoping for a rebound with “Kingdom of the Planet of the Apes,” “Inside Out 2” and “Deadpool & Wolverine.”

Disney’s sports sector reported revenue of $4.31 billion, up 2% compared with a year earlier. ESPN’s operating income was $778 million, down 2% from the year-earlier period.

Iger, during a call with analysts to discuss the results, expressed confidence that Disney will retain its package of NBA games for ESPN and broadcast network ABC in the new media-rights deal currently being negotiated. The fees the company pays the league for that deal are expected to double for Disney as deep-pocketed tech giant Amazon is intensifying the competition for those rights.


Iger declined to say whether a new NBA deal will be profitable, but he cited the importance of the property, which captures live TV audiences valued by advertisers.

“We continue to look at the NBA not only as a premium sports product but as a sports product that has growth ahead of it,” Iger said. “We feel really good about the potential package that we end up with in terms of it basically enabling ESPN to continue to shine in the television sports business.”

Meanwhile, Disney’s “experiences” division — which encompasses theme parks such as Disneyland and Walt Disney World, cruise lines and consumer products — continued to drive profit for the company with $8.39 billion in revenue, an increase of 10% from a year earlier. Operating income from the parks division was $2.29 billion, up 12%. The segment accounted for 59% of the company’s operating income.

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The growth in experiences came from higher results at Walt Disney World in Florida and Disney Cruise Line, the company said.

Additionally, Disney took a $2-billion write-down largely related to its troubled Star India business after agreeing to merge the operations into a joint venture controlled by rival Reliance Industries, a major Indian conglomerate. The Star India business, along with its HotStar streaming service, became part of Disney through its 2019 acquisition of 21st Century Fox.

That write-down, along with the struggles in the traditional TV business, weighed down the company’s otherwise positive results, analyst Jamie Lumley at financial research firm Third Bridge said in an emailed statement.


Research company CFRA lowered its rating for Disney stock to “hold” from “buy,” noting that the firm had “less confidence” in the company’s ability to realize consistent results in its entertainment and sports sectors after the quarter’s results.

Investors similarly took a more dour view of the quarterly call, as shares of Disney were down almost 10% to $104.83 midday on Tuesday.