Disney’s streaming service inches closer to profitability

In a historic moment, Disney Plus and Hulu have posted a profit for the first time. In their earnings report released on Tuesday, Disney revealed that both streaming services made $47 million combined this past quarter, a significant improvement from the $587 million loss reported at the same time last year. Despite this success, ESPN Plus still lost $65 million, resulting in a combined streaming earnings deficit of $18 million.

Despite the losses from ESPN Plus, Disney is optimistic about the future of its streaming business. The company expects its streaming business to become profitable in the fourth quarter of this year. Disney CEO Bob Iger highlighted the importance of the streaming business, stating that it was a significant driver in the positive results for the quarter.

In recent months, Disney Plus has added 7.9 million subscribers in the US and Canada, bringing total subscribers to 54 million. Disney launched a combined Disney Plus and Hulu app in March and plans to integrate ESPN Plus into the app as well. Iger announced during the earnings call that ESPN Plus will have a tile on Disney Plus, allowing all subscribers access to live games and studio programming.

While Disney did not specify the exact reasons for the turnaround in its streaming business, it is likely due to the growth of its ad-supported tier. The company launched the $7.99 per month option in December 2022 and has been encouraging subscribers to choose this tier. Disney’s deal with cable provider Charter helped drive the growth of the ad-supported tier, which ended the quarter with 22.5 million subscribers.

Looking ahead, Disney is planning to launch a standalone ESPN streaming service in the fall of 2025, as well as a dedicated sports streaming service in partnership with Warner Bros. Discovery and Fox later this year. Disney’s success in the streaming business indicates that it is well-positioned for future growth and profitability.