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<\/a><\/p>\nThe world\u2019s largest entertainment company, Disney is trying to stem losses in its direct-to-consumer business as it navigates a transition from traditional TV viewing to online options. Disney+, launched in November 2019, includes films and TV shows from the company\u2019s vast library, as well as new series tied to company brands such as Marvel and \u201cStar Wars.\u201d<\/p>\n
The company has said it expects Disney+ to be profitable in fiscal 2024.<\/p>\n
The introduction of an ad-supported tier is meant to boost subscribers and generate more revenue by giving customers options for how much they want to pay for the service. Disney said last month it sold $9 billion of ads for the upcoming TV season, with 40% of that going to its online offerings.<\/p>\n
Current Disney+ subscribers will begin receiving the ad-supported version unless they agree to pay more for the commercial-free plan.<\/p>\n
The Burbank, California-based company reported fiscal third-quarter sales and earnings that beat analysts\u2019 expectations, driven in part by strong performance of its theme parks.<\/p>\n
Sales in the period ended July 2 jumped 26% to $21.5 billion, led by soaring park revenue and beating analysts\u2019 expectations of $21 billion. Earnings jumped to $1.09 a share excluding some items, topping estimates of 96 cents.<\/p>\n
Total Subscribers<\/strong><\/p>\n With last quarter\u2019s gain, the total number of Disney+ subscribers has climbed to 152.1 million. ESPN+ now has 22.8 million subscribers and Hulu, including live TV, has 46.2 million. Netflix had 220.7 million subscribers at the close of its latest quarter.<\/p>\n Operating losses at the direct-to-consumer business, which includes the streaming services, more than tripled to $1.06 billion as the company continues to invest in new programming and expand to new territories.<\/p>\n That was worse than the $697 million analysts expected. Disney expects to spend about $30 billion on programming in the current fiscal year, down about $3 billion from its original plans.<\/p>\n Ken Leon, director of equity research at CFRA, told Bloomberg TV that he remains concerned about losses in the company\u2019s streaming services and its reliance on low-cost subscribers in India. The standouts for him were the company\u2019s TV networks and its theme parks.<\/p>\n \u201cThis was a strong quarter, mostly from the traditional, established businesses,\u201d Leon said.<\/p>\n Profit in its traditional TV business, which includes the ABC and ESPN networks, rose 13% to $2.47 billion, thanks to higher ad revenue and fees from cable distributors. Programming costs were flat to down.<\/p>\n Profit at the company\u2019s theme parks, a star in recent months as consumers went on vacations again after two years of the pandemic, rose sixfold to $2.19 billion. US resorts were the main driver, while international parks lost money and consumer products delivered only a modest increase.<\/p>\n The company reported a 26% jump in sales for its film studio to $2.11 billion, but suffered a loss of $27 million as the strong performance of \u201cDoctor Strange in the Multiverse of Madness\u201d in theaters was offset by lower home-entertainment revenue.<\/p>\n
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