What's Happening?
Disney announced a significant change in its reporting strategy, stating it will stop providing quarterly paid-subscriber and ARPU figures for Disney+, Hulu, and ESPN+ starting fiscal 2026. This decision aligns with a shift in its business model, similar to Netflix's move in 2024. CEO Bob Iger and CFO Hugh Johnston explained that the focus will be on direct-to-consumer profitability metrics rather than raw subscriber counts. Disney projects over 10 million net additions for July to September 2025, but the emphasis will be on profitability and engagement metrics moving forward.
Why It's Important?
This shift in reporting metrics marks a significant change in how streaming success is measured, impacting investors, competitors, and content creators. By focusing on profitability and engagement, Disney aims to modernize its valuation language, potentially affecting how renewals, licensing, and advertising deals are negotiated. For investors, the change reduces transparency in subscriber growth, emphasizing profit margins and advertising revenue instead. This move could influence industry benchmarks, shifting focus from subscriber counts to revenue and engagement.
What's Next?
Disney's change in reporting metrics may lead to alterations in content strategy, prioritizing shows and ad products that enhance ARPU and margins. Investors will need to adapt to the new focus on profitability disclosures and engagement reports. Rival streamers and licensors may also adjust their strategies in response to this shift, potentially leading to changes in industry standards. Analysts and stakeholders will closely monitor Disney's performance under this new reporting framework.
