Disney’s streaming business has continued to grow — but so are its losses.
The media giant said it added more than 12 million subscribers to its Disney+ streaming platform in the three months to September.
But the unit lost nearly $1.5 billion — a blow that weighed on the company’s bottom line.
CEO Bob Chapek said Disney+ has reached a “tipping point” and will become profitable by 2024.
“We believe we’re on our way to a profitable streaming business, provided we don’t see a significant shift in economic sentiment,” he said on a conference call to discuss the company’s results.
Disney has poured billions of dollars into its streaming platforms over the past few years, evolving from a company rooted in traditional television and movies into a major player in the streaming industry.
The company now has more than 235 million subscriptions across its three streaming platforms, which also include sports-focused ESPN+ and broader entertainment site Hulu.
Netflix, by comparison, has about 223 million subscribers.
With the focus shifting to profitability, Disney has announced plans to raise prices and launch an advertising version of Disney+.
Overall, the company said revenue rose 9% for the three months ended September and 23% for the fiscal year.
It reported earnings of $162 million, up from $159 million a year earlier.
That was less than analysts were expecting, sending shares down more than 5% in after-hours trading.
The company was also hurt by weakness in its traditional film and television business, where advertising declines and rising costs weighed on profits.
Paolo Pescatore, analyst at PP Foresight, said it was a “disappointing quarter” that “underscores the challenges facing a media giant as it transitions to a streaming future.”
“There is a cost involved in finding subscribers, and success is not guaranteed,” he said.
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