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Disney combined streaming makes profit for 1st time; parks falter

  • Disney made a profit off its combined streaming services 
  • Its US parks and experiences had less demand, however 
  • Operating income for parks, experiences dropped by 6%

SPAIN – 2021/07/13: In this photo illustration a close-up of a hand holding a TV remote control seen displayed in front of the Disney+ logo. (Photo Illustration by Thiago Prudencio/SOPA Images/LightRocket via Getty Images)

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(NewsNation) — Disney made a financial profit off of its combined streaming platforms for the first time, the company reported in its third quarter earnings announcement Wednesday, though it struggled when it came to its United States parks and experiences.

Total revenue for Disney in the past quarter was $23.1 billion, up from $22.4 billion during the same time period last year. In total, Disney’s income was $3.1 billion this quarter, an improvement from the $0.1 billion loss it had in the previous year’s third quarter.

Direct-to-consumer business, including Disney+ and Hulu, had a quarterly opening loss of $19 million, compared to the more than $5 million it lost a year ago.

The change in total revenue, Disney executives said, was driven by a growth in subscriptions and advertising revenue. A strong three months for ESPN+, which had a record-breaking number of adults aged 18-49 watching in primetime for the quarter, also helped.

Money from ad revenue increased by 20%, with growth across Disney+ Hotstar in India, Disney+ and Hulu. Disney+ Core, which includes the U.S. and Canada, gained 700,000 subscribers in the third quarter, with executives expecting more in the fourth.

“This better-than-expected performance, combined with our profitable results at ESPN+, resulted in positive profitability at our combined DTC streaming businesses for the first time and one quarter ahead of our previous guidance of achieving profitability in Q4,” executives said.

Streaming Service Prices

One of the “building blocks” Disney is using to keep spurring this Q3 growth include hiking prices this fall. Starting Oct. 17, Disney+ and Hulu will be $9.99 a month with ads, which is $2 more than before, NewsNation local affiliate KTLA reported. An ad-free version is also set for a $2 increase at $15.99 monthly, and Hulu, which Disney has full control over, will be $1 more. ESPN+, which is only available with ads, is going to be $11.99, or $1 more.

New prices, according to KTLA, won’t affect the recently introduced Disney+/ Hulu/ Max streaming bundle or the Disney+ and Hulu no-ads bundle.

In comparison: HBO Max prices range from $9.99 a month with ads to $16.99 a month ad-free, to its “ultimate” $20.99 bundle, which is both ad-free and includes 4k. Reuters reports HBO Max plans on halving subscription fees for six months for users who accessed HBO via Prime video channels, as well as new and returning subscribers, for up to six months.

An Amazon Prime Video membership costs $8.99 monthly, while Netflix charges $6.99 a month for a package with ads and $15.49 per month without them. The price for a “Premium” Netflix account with 4k ultra HD is $22.99 a month. 

Disney parks see weaker demand

Contrary to its successes in the streaming realm, Disney saw a 6% decrease in operating income for domestic parks and experiences. Inflation, technology spending and new guest offerings were cited by the company as reasons for the drop.

Chief Financial Officer Hugh Johnston said at a company conference call that parks were hit by the financial stress felt by lower-income consumers. Higher-end consumers are doing more traveling overseas now, Johnston said, which helped explain how international parks and experiences had a 2% bump in operating income.

Overall, Q3 revenue for parks only increased by 2%. Stocks for Disney fell Wednesday, partly as a result of the lessening demand in parks and experiences.

The Associated Press contributed to this report.

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