Well, well, well—look who just remembered how to make streaming profitable. Disney’s fiscal Q2 earnings weren’t just good, they were a full-blown flex. Despite all the economic hand-wringing and macro doom-posting, the Mouse House delivered a beatdown on Wall Street expectations, led by a surprising comeback in streaming and the kind of bullish bravado only Bob Iger can deliver with a straight face.
Let’s get to the numbers. Disney+ added 1.4 million subs in the quarter, bringing the total to 126 million. Hulu tacked on another 1.3 million, now sitting at 54.7 million. Even as ESPN+ bled 800,000 subs, dropping to 24.1 million, Disney still walked away with a combined DTC gain of 2.5 million new subscribers. Remember when they told us subs were going to decline? Cute.
And here’s the kicker: streaming actually made money—$336 million in operating income from the DTC business, up more than 7x from last year’s pitiful $47 million. That’s what happens when you stop bleeding cash on bad bundles and half-baked originals and actually put “Moana 2” and “Mufasa” where people can find them.
But this isn’t just a one-off miracle. Iger’s got a game plan—and for once, it’s not just Disney speak for “we’ll figure it out later.” He laid out three pillars for turning streaming into a “true growth business,” and shockingly, they’re not half bad.
Pillar One: All the Apps, One Experience
First, Disney’s going full Frankenstein with Hulu and Disney+, sewing them together into one experience—like cable, but shinier. The result? Less churn, more engagement, and a user experience that doesn’t require a map. And when ESPN’s long-promised DTC product finally arrives, the whole bundle becomes a one-stop shop for nostalgia, superheroes, and touchdown replays. Bundled, integrated, monetized—just how Wall Street likes it.
Pillar Two: Tech That Works (Let’s Hope)
Second, Disney is talking a big game about platform upgrades—improved personalization, better ad targeting, and, yes, a password-sharing crackdown. Iger says the improvements are coming in the “near-term,” not some vague future roadmap. But here’s the thing: this is the same company that bought BAMTech for its live-streaming muscle… and still managed to tank both UFC 313 on ESPN+ and Hulu’s live Oscars stream within the last few months. One was a $79.99 PPV meltdown, the other a prestige branding faceplant.
So yeah, the tech talk sounds nice—but until ESPN+ can stream a fight without buffering and Hulu can finish an awards show without crashing, let’s not act like they’ve cracked the code. Disney says the fixes are coming fast. Viewers—and advertisers—will be timing them.
Pillar Three: Content, But With Restraint
Third, and most surprising, is Disney’s sudden discovery that maybe flooding your platform with C-list Marvel spin-offs isn’t the move. Iger owned it—admitting they lost the plot trying to stuff every IP into streaming like a clown car. Now, the focus is back on quality, not quantity, especially outside the U.S. That means fewer “Why does this exist?” shows and more regionally relevant content that might actually draw viewers. Oh, and Thunderbolts? According to Iger, it’s the best-reviewed Marvel film in years. So maybe less is actually more.
Of course, no Disney earnings call is complete without a touch of theme park theatrics—this time, literally. Disney dropped a shiny surprise: it’s building its 13th theme park, this one in Abu Dhabi, on Yas Island, already home to Ferrari World and SeaWorld. Strategic partner Miral will foot the bill while Disney collects royalties, sprinkles some pixie dust, and keeps the IP fresh. The park’s pitch? “Authentically Disney, distinctly Emirati.” Translation: Mickey meets oil money.
And while most companies are busy lowering guidance or pretending they don’t see the economic asteroid headed their way, Disney’s raising the bar. Full-year EPS guidance? Up to $5.75. Streaming sub growth? Modest but positive. Entertainment and sports income? Double-digit growth expected. Apparently, when you’re charging more for less, and people still don’t cancel, optimism comes easy.
But not everything is a fairytale. Linear TV continues to freefall—revenue dropped 13%—and ESPN’s bottom line got smacked by the cost of too much football (yes, that’s a thing now). And yes, Disney did take a $109 million charge for “content impairments,” which is corporate speak for “remember that show you greenlit in 2021? Yeah, we’d rather forget it too.”
Still, investors rewarded the Mouse with a 10% share price bump, proving that if you beat the Street, even slightly, while whispering “Abu Dhabi expansion” and “Moana sequel,” Wall Street will practically hand you the keys to Cinderella’s castle.
Disney’s streaming machine is no longer the money pit it once was—and for once, they didn’t need to raise prices or sacrifice Baby Yoda to do it. With Iger’s three-pillar playbook finally clicking into place, this quarter’s not just a win—it’s a warning shot to anyone still coasting on SVOD fumes.
The streaming war isn’t over—but for this round, Disney took the high ground. And apparently, that ground is in the desert.
