On Thursday, Disney released its third quarter earnings, showing strong gains in its streaming division, with increases in profits and the numbers of its active subscribers.  Investors were encouraged, sending the company’s share price to a six-month high.
Many believe that Disney is successfully navigating its way through <a href="https://www.hollywoodreporter.com/business/business-news/can-comcast-save-cable-tv-business-rollup-1236050224/">the decline in its linear and cable television busines</a>ses, offset by the upturn in its digital, direct-to-consumer service.
Disney’s cable businesses, saw profits decline by 38% compared with last year, due to lingering effects of last year’s actors’ and writers’ strikes, downward pressure on profits from a less advantageous <a href="https://deadline.com/2023/09/disney-spectrum-reach-carriage-agreement-ending-10-day-impasse-espn-monday-night-football-1235542828/">carriage deal that Disney reached with Spectrum</a>, and a continued decline in the overall number of cable subscribers.
Disney theme parks division was also soft in the quarter, with an operating income of $1.06 billion, a 6% decline compared with the third quarter in 2023.  Disney heads pointed the blame at factors unique to this summer, including the launch of two new cruise lines and the decline in summer attendance at Disneyland Paris due to the Paris Olympics.
Despite these declines, investors gave more weight to gains in Disney’s streaming and studio divisions, both of which grew significantly.  During Q3, Disney released its two most successful theatrical releases since 2019, with Pixar’s INSIDE OUT 2 grossing $1.7 billion and Marvel’s DEADPOOL &amp; WOLVERINE earning $1.3 billion worldwide.  Disney’s studios posted a profit of $316 million, compared with last year’s third quarter loss of $149 million.
During the quarter, Disney’s streaming services, led by Disney+, Hulu, and ESPN+, posted a quarterly profit of $321 million, a significant improvement from a year ago when it posted a loss of $387 million.  It also reported a net increase of 4.4 million subscribers across all platforms.  Profits came from an increase in subscription fees as well as new revenues from advertising in its ad-supported tiers of service.  In a “hot mic” moment during the earnings call, Disney CEO Bob Iger <a href="https://deadline.com/2024/11/bob-iger-hot-mic-disney-earnings-streaming-1236176581/">accidentally revealed</a> that 37% of its U.S. subscribers to Disney+ are signed up for the ad-supported package.  Iger explained increases in the ad-free service were meant to encourage more users to sign up for its ad-supported tier, a strategy to increase ad revenue from the platform overall.

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