Disney Reports Profit Boost from Streaming Service and Blockbuster Film
Disney has announced a return to profit, thanks to the success of its streaming service and blockbuster film Inside Out 2. The company reported earnings before interest and tax of $254 million (£200 million) from content sales and licensing, largely driven by the record-breaking success of the animated film Inside Out 2.
The original Inside Out film, available on Disney’s streaming service Disney+, drove 1.3 million new subscriptions and garnered over 100 million views since the sequel’s trailer launched in March. This contributed to the streaming portion of the business, which includes platforms Hulu and ESPN+, surprisingly becoming profitable for the first time.
The strong performance of ESPN+, a predominantly sports-focused platform, in the third quarter (Q3) helped Disney’s streaming segment achieve profitability, despite the company’s initial expectation of it being popular later in the year. This success follows Disney’s decision to crack down on password sharing, a move inspired by streaming giant Netflix.
The streaming segment’s profitability is a significant turnaround from the previous year, where it reported a quarterly operating loss of $19 million (£14.9 million). Overall, Disney’s entertainment section saw a nearly tripled revenue of $1.2 billion (£942 billion) in the same three-month period.
Despite the positive results, not all areas of Disney’s business saw success. The company’s US-based theme parks experienced a decline in revenue, attributed to increased costs driven by inflation, technology spending, and new offerings. Furthermore, Disneyland Paris is expected to see a decrease in visitors due to the impact of the Olympics on consumer travel.
In the coming months, Disney anticipates a “moderation in demand” at its parks, resulting in a “mid-single-digit” decrease in income for the final months of the financial year. While not all news was good, Disney’s overall performance demonstrates the company’s adaptability and resilience in a challenging economic climate.
