Disney+ Adds To Direct To Consumer Division’s $398 Million Loss
Disney announced its second quarter results today, which has seen its Direct To Consumer division, which includes Disney+, have its operating costs climb up to a $393 million loss, which is up from last quarters $188 million. Though the revenues for the quarter increased 15% to $955 million.
The increase in operating loss was due to our ongoing investment in ESPN+, which was launched in April 2018, costs associated with the upcoming launch of Disney+, a loss from the consolidation of Hulu and higher losses from streaming technology services, partially offset by an increase at our International Channels.
In the current quarter, 100% of Hulu’s operating results from March 20, 2019 to March 30, 2019 are included in the Direct-to-Consumer & International segment as a result of our acquisition of a controlling interest in Hulu. Prior to March 20, 2019, the Company’s ownership share of Hulu results was reported as equity in the loss of investees.
The increase at our International Channels was due to higher affiliate rates and lower sports programming costs.
Disney’s CEO Bob Iger said in a statement:
“The positive response to our direct-to-consumer strategy has been gratifying, and the integration of the businesses we acquired from 21st Century Fox only increases our confidence in our ability to leverage decades of iconic storytelling and the powerful creative engines across the entire company to deliver an extraordinary value proposition to consumers.”
Overall, Disney’s overall revenue was up 3% to $14.9 billion, as its consumer products, film and theme park divisions were up on the last quarter.
With Disney+ currently just costing Disney money, with no income, it’s not a surprise to see the losses mount for the division. However Disney have been very open about how the Direct To Consumer division will take years to make a profit due to the costs involved in getting it all going.