There were 118.3 million Disney+ subscribers globally at the end of the first half of 2024, up by just 0.7 million on the previous quarter. Only a modest increase is expected in the next quarter. The company said that together with the positive results for ESPN+ sport, the combined online video businesses were profitable for the first time. According to generally accepted accountancy principles, the direct-to-consumer entertainment segment that includes Disney+ made a small loss.
After adding 6 million Disney+ subscribers in the United States and Canada in the previous quarter, the number rose by just 0.8 million in the second quarter and international subscribers fell by 0.1 million.
The total number of Hulu subscribers rose by 2% to 51.1 million, of which the number taking the Live TV option fell by 2% to 4.4 million.
The chief executive of the Walt Disney Company, Bob Iger, said in a statement: “This was a strong quarter for Disney, driven by excellent results in our Entertainment segment both at the box office and in DTC, as we achieved profitability across our combined streaming businesses for the first time and a quarter ahead of our previous guidance.”
He was quick not to dismiss the television business. “I can’t say enough about how great our television businesses have been performing, both in terms of the bottom line, but also in terms of creatively,” he said. “I think it’s one that you’ll ultimately see really blended together as our streaming platform grows over time.”
The online direct-to-consumer segment of the entertainment business narrowed its operating loss to $19 million on quarterly revenue of $5.8 billion.
However, when combined with the ESPN+ sports service, which made profit of $66 million, the online businesses turned a profit of $47 million.
That should be viewed in the context of total quarterly revenue across the group of $23.2 billion, compared to $22.3 billion for the same quarter the previous year.
Bob Iger has talked about strategic partnerships for ESPN but would not be drawn on this. “The only thing I can say is, believe it or not, we’re still having conversations about it.”
The online strategy seems to be paying off for Disney, although it should be noted that Disney+ and Hulu only represent a quarter of Disney revenues and are built on a substantial back catalogue of intellectual properties from traditional movie and television productions.
“We feel very bullish about the future of this business,” he told analysts. “We’re not saying much more about it, except you can expect that it’s going to grow nicely in fiscal 2025.”
“I think we’ve made a ton of progress,” Hugh Johnston, the chief financial officer, noted. “We were losing $1 billion a quarter not all that long ago, and now we’re making money. Our expectation is we’re going to continue on that journey to making more money.”