Walt Disney slashed its video streaming loss in the second quarter as the company slashed costs and raised subscription prices for services including its flagship Disney Plus platform.
Since returning to the company in November, Disney CEO Bob Iger has been under pressure to stop the cash drain from his streaming service. Disney said on Wednesday that in the quarter ended April 1, its streaming media business loss fell 26% from a year earlier to $659 million, better than Wall Street’s forecast for a loss of $850 million and $400 million less than in the previous quarter.
Disney said it made streaming savings in part by cutting marketing costs, even as spending on programming and production continued to rise. Streaming revenue rose 12% from a year earlier, partly due to higher subscription fees.
Investors are losing patience with Disney and its rivals investing in streaming at all costs. Since launching its streaming business in 2019, Disney has poured more than $10 billion into its streaming business, going head-to-head with Netflix.
Total subscribers for its streaming services, which include Disney Plus, ESPN Plus and Hulu, fell slightly to 231 million from 234 million in the previous quarter, the company said. But its average revenue per subscriber has risen.
In a statement, Iger said he was “pleased” with the improvements in the streaming business, which he said “reflect the strategic changes we’re making across the company to realign Disney.” The company is cutting 7,000 jobs and expects to save $5.5 billion. Disney said it took a charge of $152 million in the quarter, “primarily for severance payments.”
Iger also oversaw the restructuring of Disney’s media and entertainment group.
Disney earned 93 cents a share for the quarter, meeting Wall Street expectations, on net income of $1.27 billion on revenue of $21.98 billion. Its theme parks have continued to perform strongly since the lifting of pandemic restrictions, with operating income up 23% to $2.1 billion, helped by strong attendance at its parks in Shanghai, Hong Kong and Paris.
But revenue from Disney’s television networks fell 7% in the quarter due to lower ad sales, and operating income fell 35%.
Shares of Disney are up 13% this year.