The Walt Disney Co. saw its streaming losses narrow in the second quarter amid an exodus of 12.5 million subscribers from its Disney+ Hotstar streaming platform in India.
For the quarter, Disney exceeded Wall Street’s targets on earnings per share but missed on revenue. The Mouse reported total revenue of $22.3 billion, up 4% from the year-ago quarter, and operating income of $3.6 billion, down 6%.
Disney executives previously warned Wall Street that subscriber losses were coming for the Disney+ Hotstar service amid a strategy shift to move away from low-margin subscribers. The loss of key sports rights in the region also set the stage for significant churn on the Hotstar front.
Losses in the direct-to-consumer unit were cut in half compared to the same period last year. DTC operations delivered a $512 million loss, compared to $1 billion in 2022. Operating income for Disney’s linear networks sank 23% to $1.9 billion. Revenue for Disney’s Parks, Experiences and Products arm was up 13% to $8.3 billion and operating income gained 11% to $2.4 billion.
Disney notched a gain of 800,000 subscribers in other parts of the world. In the U.S. and Canada, Disney+ lost 300,000 subscribers while the streaming-only side of Hulu gained about that same number.
“Our results this quarter are reflective of what we’ve accomplished through the unprecedented
transformation we’re undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business,” said Disney CEO Bob Iger. “In the eight months since my return, these important changes are creating a more cost-effective, coordinated, and streamlined approach to our operations that has put us on track to exceed our initial goal of $5.5 billion in savings as well as improved our direct-to-consumer operating income by roughly $1 billion in just three quarters. While there is still more to do, I’m incredibly confident in Disney’s long-term trajectory because of the work we’ve done, the team we now have in place, and because of Disney’s core foundation of creative excellence and popular brands and franchises.”
More to come