What's Happening?
Disney has announced that it will stop reporting the number of subscribers for its streaming services Disney+, Hulu, and ESPN+. This decision aligns with a broader strategy to focus on the profitability of its streaming operations rather than subscriber counts. Disney CEO Bob Iger and CFO Hugh Johnston explained that metrics like paid subscribers and average revenue per unit (ARPU) have become less meaningful in evaluating business performance. The change will take effect with the first quarter of fiscal 2026 for Disney+ and Hulu, and the fourth quarter of fiscal 2025 for ESPN+. Disney plans to provide information on Entertainment Direct-to-Consumer profitability instead. The company reported a 6% increase in streaming revenue for the June 2025 quarter, with a profit of $346 million.
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Why It's Important?
This shift in reporting reflects a significant change in how media companies evaluate their streaming services. By focusing on profitability rather than subscriber numbers, Disney is aligning its financial reporting with its operational strategies. This move could influence other companies in the industry to adopt similar practices, potentially changing how success is measured in the streaming sector. The decision may impact investors and analysts who rely on subscriber data to assess company performance. Disney's approach could lead to a more sustainable business model, emphasizing long-term growth and profitability over short-term subscriber gains.
What's Next?
Disney's decision to stop reporting subscriber numbers may prompt reactions from investors and analysts who have traditionally used these metrics to gauge company performance. The company plans to integrate Hulu and Disney+ into a single app experience by 2026, which could enhance user engagement and reduce churn. This integration may also provide opportunities for bundling and pricing strategies, potentially increasing revenue. Disney's focus on profitability and operational efficiencies may lead to further strategic shifts in its streaming business.
