Walt Disney slashed its video streaming losses in the second quarter as the company cut costs and raised subscription prices for services, including its flagship platform Disney Plus.
Since returning to the company in November, Disney chief executive Bob Iger has been under pressure to stop the hemorrhage of money into his streaming services. Disney said Wednesday it reduced streaming losses 26% year-over-year to $659 million in the quarter ended April 1, better than Wall Street’s forecast of $850 million losses and a $400 million improvement. dollars over the previous quarter.
Disney said it achieved the savings in streaming in part by cutting marketing costs, though programming and production expenses still increased. Streaming revenues increased 12% year-over-year, thanks in part to increased subscription fees.
Investors have lost patience with Disney and its rivals’ growth-at-all-cost investment in streaming. Disney has pumped more than $10 billion into its streaming business since launching in 2019 as it clashed with Netflix.
The company said total subscribers to its streaming services, which includes Disney Plus, ESPN Plus and Hulu, fell slightly to $231 million from $234 million in the prior quarter. But its average revenue per subscriber has increased.
Iger said in a statement that he was “pleased” with the improvements in the streaming business, which he said “reflect the strategic changes we’ve made across the company to realign Disney.” The company is in the midst of cutting 7,000 jobs, which is expected to save $5.5 billion. Disney said it charged $152 million in the quarter, “primarily for the layoff.”
Iger also oversaw a restructuring of Disney’s media and entertainment group.
Disney earned 93 cents a share in the quarter, in line with Wall Street expectations, and net income of $1.27 billion on revenue of $21.98 billion. Its theme parks have continued to perform well since pandemic restrictions were lifted, with operating income up 23% to $2.1 billion on strong attendance at parks in Shanghai, Hong Kong and Paris.
But Disney’s TV networks revenue fell 7% in the quarter and operating profit fell 35% due to lower advertising sales.
Disney’s shares are up 13% this year.
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