Disney is exploring free, ad-supported streaming channels and plans to add more sports content to Disney+ as it aims to make the platform a company centerpiece.
Chief Executive Josh D’Amaro said during the company’s fiscal third-quarter earnings call Wednesday that Disney is looking at a free product “to expand our reach to a customer segment that is more price sensitive.” So-called FAST channels, such as Fox’s Tubi and Paramount’s Pluto TV, are growing as viewers cut the cord from traditional pay-TV and push back against rising streaming subscription prices.
Bringing third-party streamers onto Disney+ is also under consideration, D’Amaro said, pointing to the success of the company’s partnership with Warner Bros. Discovery’s HBO Max. “We’re one of a very short list that’s positioned for aggregation,” he said.Unlike some rivals pursuing acquisitions or spin-offs—such as Comcast spinning off entertainment holdings or Fox’s $22 billion purchase of Roku—D’Amaro said Disney plans no similar moves.
Disney’s revenue rose 7% to $25.2 billion in the quarter ended in June, just shy of FactSet analyst expectations, buoyed by strong domestic theme-park attendance and the box-office success of Toy Story 5. Net income fell by half to $2.6 billion due to a one-time tax benefit in the year-earlier period; excluding certain items, diluted earnings per share rose to $2.06 from $1.61, beating forecasts.
The experiences unit, which includes theme parks and cruise lines, saw revenue climb 10%. Domestic park attendance grew 3% and per-capita spending rose 4%. While international attendance remained soft, CFO Hugh Johnston said domestic guests more than offset the gap. The parks growth contrasts with softer results at rivals such as Comcast’s Universal, whose theme-park revenue rose just 2.7%. D’Amaro, a former parks executive, has emphasized new experiences and major expansion of the cruise fleet.
Pixar’s Toy Story 5, released June 19, has surpassed $1 billion in global box office and helped lift consumer-product sales. Two other high-profile releases—Star Wars: The Mandalorian and Grogu (May) and the live-action Moana—underperformed. The results underscore the ongoing importance of traditional and in-person entertainment to Disney’s results even as streaming remains a major industry focus.