Disney streaming results improve as cable TV wanes | Parami News

for disneythe future is now.

Although five years in the making, Disney’s streaming business almost turned a profit for the first time in the second quarter, losing just $18 million between Disney+, Hulu and ESPN+. That was an improvement from a loss of $659 million a year ago.

Excluding ESPN+, Disney+ and Hulu, it actually made $47 million in the quarter. In the second quarter of last year, Disney+ and Hulu lost $587 million.

The argument from all the major traditional media companies is that streaming will eventually replace cable television as the primary money-making engine. That’s why Disney, Paramount Worldwide, Warner Bros. Discovery and ComcastBoth NBCUniversal affiliates have established their own subscription streaming services.

That hasn’t happened yet, but this season finally suggests that moment is coming. Not only is Disney almost making money in streaming, but the company’s traditional linear TV performance is abysmal.

Disney hasn’t offered ESPN outside of its cable bundle for years because sports networks are so profitable within the walled gardens of traditional TV. Those days are almost over.disney is Introducing leaner bundles Warner Bros. Discovery Channel’s linear cable channel and fox This fall, ESPN will air outside of traditional cable television for the first time. next year, Disney will launch its flagship ESPN streaming service, allowing consumers to subscribe to ESPN without cable TV.

Looking at Disney’s second-quarter results, it’s clear why the company finally pulled the strings on ESPN. ESPN’s revenue rose 3% to $4.21 billion, but operating income fell 9% to $799 million. Disney said lower advertising revenue, a decline in cable TV subscribers and higher programming costs due to the college football playoffs contributed to the decline.

The declines at the company’s other linear networks, such as ABC, Disney Channel, FX, National Geographic and Disney Junior, were even more alarming. Linear network revenue for Disney’s portfolio, excluding ESPN, fell 8% to $2.77 billion. Operating income fell sharply by 22% to $752 million.

Disney shares fell 5% in premarket trading.

A big question for the company is whether its investors will accept this new reality.That will depend on Disney’s streaming execution over the next few years, and likely on CEO Bob Iger’s A successor is still to be named.

Revealed: Comcast-owned NBCUniversal is the parent company of CNBC.

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