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nytimes.com
Brooks Barnes
Reporting from Los Angeles
Aug. 9, 2023

Robert A. Iger’s urgent need to overhaul Disney — to turn its streaming division into a profitable enterprise and pull back on its troubled traditional television business — came into sharp relief on Wednesday.

Disney’s streaming operation lost $512 million in the most-recent quarter, the company said, bringing total streaming losses since 2019, when Disney+ was introduced, to more than $11 billion. Disney+ lost roughly 11.7 million subscribers worldwide in the three months that ended July 1, for a new total of 146.1 million.

All the decline came from a low-priced version of Disney+ in India. Last year, Disney lost a bid to renew the expensive rights to Indian Premier League cricket matches. Excluding India, Disney+ gained 800,000 subscribers, primarily overseas.

To make streaming profitable, Mr. Iger, Disney’s chief executive, has shifted the focus at Disney+ away from brisk subscriber growth, which requires expensive marketing campaigns. Instead, Disney has been trying to make more money from the Disney+ subscribers it already has. The monthly price for access to an ad-free version of Disney+ rose to $11 in December, from $8.

Another hefty price increase is on the way. Starting on Oct. 12, the ad-free version will cost $14, Disney said. Hulu, which is also controlled by Disney, will begin charging $18 for ad-free access, up from $15. As an incentive, Disney will begin selling a new streaming package — ad-free access to both Disney+ and Hulu — for $20 a month starting on Sept. 6.

The ad-supported options for both Disney+ and Hulu will remain the same, at $8. “We’re obviously trying with our pricing strategy to migrate more subs to the advertiser-supported tier,” Mr. Iger told analysts on a conference call. The pricing news, along with a vow by Mr. Iger to follow Netflix by cracking down on password sharing, sent Disney shares up roughly 2 percent in after-hours trading.

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Disney Theatrical Group: Thomas Schumacher, the longtime head of Disney’s theatrical arm and one of the most powerful people on Broadway, is relinquishing his role overseeing the division’s business operations and stepping into a purely creative role.

ESPN: The sports network has been Disney’s financial engine for nearly 30 years. But with profits down and dwindling opportunities for growth, it seems that those days are over.
Bob Iger: The 72-year-old chief executive of Disney has extended his tenure through 2026, as finding an heir continues to be difficult and questions mount about the viability of the company’s vaunted movie studios and theme parks.

The Man Reimagining Classics: Sean Bailey, a low-profile Disney executive, is in charge of live-action remakes of films like “The Little Mermaid.” It’s a job that puts him in the middle of a partisan divide.

Disney still relies on old-line channels like ESPN and ABC for roughly a third of its operating profits — and those outlets are being maimed by cord cutting, sports programming costs and advertiser pullback. Disney’s traditional channels had $1.9 billion in quarterly operating income, down 23 percent from a year earlier. Disney cited lower ad sales at ABC, partly because of viewership declines, and lower payments from ESPN subscribers, along with higher sports programming costs. (On a positive note, ESPN ad sales increased 10 percent.)

It was the second consecutive quarter in which Disney’s traditional TV business recorded a sharp decline in operating income.

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