Walt Disney Co (NYSE: DIS) announced on Wednesday that it cut streaming losses by $400 million in fiscal second quarter of 2023 compared to the previous quarter while also losing subscribers.
A price increase and lower marketing expenses aided the streaming unit’s performance, which completed the three-month quarter with a $659 million operating deficit. The division lost $1.1 billion in the previous quarter.
Overall, diluted profits per share were 93 cents, which was a penny shy of the analysts’ projection. Revenue was $21.82 billion, slightly higher than the expected $21.79 billion.
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“We’re pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success,” CEO Bob Iger said in a statement.
Total subscriptions to Disney+’s flagship service fell by 4 million from the previous quarter to 157.8 million, also falling short of the expected 163.1 million.
The majority of the defections came from Disney+ Hotstar in India, which lost streaming rights to Indian Premier League cricket matches. Disney also lost 300,000 customers in the United States and Canada, where prices were raised in December.
CFO Christine McCarthy had warned in February that the price rise would result in “modestly higher” cancellations.
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Theme parks, particularly foreign parks, were a notable outperformer in the quarter, with operating income reaching $2.17 billion, beating expectations of $2.14 billion and matching recent developments at competitors such as Comcast’s Universal.
The report was the first since Disney revealed its new three-pronged company reorganization — focused on Disney Entertainment, ESPN, and Disney Parks, Experiences, and Products — as Iger strives to streamline and reset the media behemoth.
Iger, who came out of retirement in November to address the company’s issues, proposed an overhaul in February, promising to slash $5.5 billion in costs, in part through 7,000 job cutbacks.
As Disney attempts to establish a streaming company, its traditional television industry confronts challenges. Operating income at linear networks fell 35% year on year to $1.8 billion, owing to increased sports programming and production expenditures associated with the College Football Playoffs and the NFL at ESPN, as well as lower advertising revenue at ABC and its owned television stations.
On Monday, Disney filed a new federal lawsuit against Florida Gov. Ron DeSantis, accusing him of escalating his “retribution campaign” against the firm by signing legislation to void Disney’s development deals in Orlando.
Furthermore, the writers’ strike is already having an impact on the corporation, with production shutdowns of Marvel Studios’ “Blade,” which was due to begin filming in Atlanta next month, as well as the Disney+ Star Wars series “Andor.”
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