In the second fiscal quarter of 2024, Walt Disney Co. reported a revenue of $6.19 billion for its streaming business, which includes Disney+, Hulu, and ESPN+. This marks a 12% increase compared to the previous year. Despite this growth, the streaming business recorded an operating loss of $18 million for the quarter, a significant improvement from the $659 million loss incurred during the same period in the previous year.

However, there is positive news for Disney's "entertainment streaming" segment, comprising Disney+ and Hulu, as it achieved profitability with an operating income of $47 million. This is a significant improvement from the $587 million loss recorded in the same quarter last year. Excluding ESPN+, the streaming revenue reached $5.64 billion, showing a 13% increase from the previous year.

The strong performance of Disney's streaming business, coupled with the continued success of its experiences division, which includes amusement parks, has been instrumental in driving the company's overall second-quarter performance. The CEO of Disney, Bob Iger, acknowledged the growth in streaming as a catalyst for the positive results.

Despite the progress made, Disney's significant investment in streaming has resulted in substantial losses over the years. However, the company anticipates that its combined streaming operations will finally turn a profit in the fiscal fourth quarter of 2024.

In addition to the streaming business, Disney's traditional TV networks faced challenges during the quarter. The linear TV business reported a decrease in revenue, amounting to $2.77 billion, down 8% compared to the same period last year. The company attributed these losses to lower affiliate revenue caused by a decrease in subscribers due to a cable licensing agreement with Charter Communications. The negotiations led to a blackout of ESPN and ABC channels for more than ten days.

Disney's film studio business also struggled during the second quarter with a 40% decline in revenue, reaching $1.39 billion, resulting in an operating loss of $18 million. The weak box office results can be attributed to the absence of major releases like Marvel's "Ant-Man and the Wasp: Quantumania" and "Avatar: The Way of Water" from the previous year.

On a positive note, Disney's sports sector reported a revenue increase of 2%, amounting to $4.31 billion. ESPN operating income was $778 million, down 2% compared to the same period last year. Disney expressed confidence in retaining its package of NBA games for ESPN and ABC in the new media rights deal, despite increased competition from tech giant Amazon.

In terms of revenue, Disney's experiences division, which includes theme parks, cruise lines, and consumer products, stood out with $8.39 billion, a 10% increase from the previous year. Operating income from the parks division reached $2.29 billion, accounting for 59% of the company's total operating income.

To address the streaming operation losses in India, Disney has announced a partnership with the Indian conglomerate Reliance Industries. This move aims to bolster Disney's presence in the country and drive profitability in the streaming segment.

Despite the positive performance of the streaming business and experiences division, the struggles in Disney's traditional TV and film sectors, along with a $2 billion write-down related to the troubled Star India business, have tempered the otherwise favorable results. Analysts have expressed concerns about the company's ability to consistently deliver results in the entertainment and sports sectors.

In response to the quarterly report, investors have reacted negatively, with Disney's shares dropping nearly 10% to $104.83 midday on Tuesday. With profitability goals for the streaming business set for the fourth quarter of 2024, Disney will need to address challenges in its linear TV and film sectors to regain investors' confidence moving forward.

Overall, Disney's streaming business shows promise for future growth, with a focus on turning losses into profits. As the company continues to invest in its streaming services and leverage its popular content, the path to profitability becomes clearer.