Disney significantly reduced losses in its streaming business last quarter. The division, which includes the Disney service and the ESPN sports offering, posted operating red figures of $216 million after a loss of a good $1 billion a year earlier. At the same time, the group benefited from growth in its theme parks and cruises.
But Wall Street’s focus is on changes in the entertainment giant’s media business. The cable TV business in the US, which has been a reliable moneymaker over the years, is shrinking – as more and more people switch to streaming. Like other Hollywood companies, Disney set up its own streaming service and accepted high losses in order to catch up with industry leader Netflix. A year ago, Disney boss Bob Iger implemented a $7.5 billion savings program that the company may well exceed.
Number of Disney subscribers drops slightly
In the last quarter, sales in cable TV fell by twelve percent to 2.8 billion dollars (2.6 billion euros), as Disney announced after the US stock market closed. The division also posted an operating profit of $1.24 billion – seven percent less than a year earlier. Revenues in the streaming business rose by 14 percent to a good six billion dollars. At the same time, the number of subscribers to Disney’s core offering fell by one percent to 111.3 million.
Iger announced a $1.5 billion investment in gaming company Epic Games. Among other things, a Disney universe compatible with the epic game “Fortnite” should be created, Iger told the TV station CNBC. However, this will take a few years, he added.
Disney’s consolidated sales remained virtually unchanged at $23.5 billion. Quarterly profit rose from $1.28 to $1.9 billion. Disney shares temporarily rose by around seven percent in after-hours trading.
