Earlier this week, The Walt Disney Company’s CEO and CFO hosted an earnings call to give updates to shareholders. During the call, it was revealed that Disney’s streaming services have gained profitability earlier than expected. It turns out, ESPN+ is what pushed Disney’s Direct to Consumer segment into profitability. In total, Disney’s DTC made $47 million in operating income in its 3rd quarter.
The profitability of DTC is a huge difference from where things were for Disney even 2 years ago. At that time, DTC lost $1 billion for the quarter. Since then, Disney has pivoted to focus on profitability for its streaming services over subscriber count. While DTC is profitable this quarter, it is still a very small part of Disney’s overall profits. For this quarter, they were at $23.2 billion.
“We’ve been talking a lot about adding the technology features that we need, to basically make it a higher-return, higher-margin business and a more successful business. And we’re doing that right now,” CEO Bob Iger said on the earnings call. One way Disney is hoping to do this is with “stronger recommendation engines.”
Moving forward, Disney hopes to build on this first success and continue to make its streaming services more profitable. September will see Disney begin to crack down on password sharing. In October, prices will be going up for Disney’s streaming services. Disney hopes that these initiatives will continue to build on its streaming services profitability and also help the company pivot from linear programming to streaming.
What do you think of Disney’s streaming services becoming profitable? Do you think they will continue to grow in profitability? Share your thoughts and opinions in the comments below!
