The Walt Disney Co. on Wednesday reported its fiscal second-quarter results, with the company largely beating Wall Street expectations on most key metrics, including revenue.
As with any major entertainment company, streaming profitability (or lack thereof) remains one of the most viewed metrics. Losses in Disney’s direct-to-consumer business continued to slide, falling to $659 million in the quarter, down from $1.1 billion the prior quarter, and from the high of $1.5 billion of what would be Bob Chapek’s final earnings report as CEO.
In other streaming news, the total number of Disney+ subscribers fell slightly to 157.8 million, up from 161.8 million in the previous quarter. However, most of those declines were with Disney+ Hotstar, with Disney+ domestic subscriptions dropping by just 300,000, something of a surprise given that the price increase would have been largely felt for most consumers over the past quarter.
To that end, Disney+’s average revenue per user (ARPU) increased 20 percent year over year for domestic users and 6 percent internationally excluding Hotstar.
Revenues in the streaming division rose to $5.5 billion (+12 percent).
Disney’s total revenue in the quarter was $21.8 billion, up 10 percent from a year earlier, with operating income of $3.3 billion, down 11 percent from a year ago.
The decline in revenue is almost exclusively due to ongoing challenges in the linear TV business. Linear network revenue fell 7 percent year over year to $6.6 billion, while division operating income fell 35 percent to $1.8 billion.
Higher sports rights and production costs at ESPN, combined with lower affiliate and ad revenues, were blamed on cable, while ABC and the ABC stations had lower ad revenues, a trend seen across the market.