Disney to Centralize Streaming Offerings Within Disney+

Disney’s streaming business—home to Disney+, Hulu and ESPN+—reported a profit of $293 million for the December quarter, compared with a $138 million loss a year earlier. That profit exceeded analyst expectations by more than $100 million.

After years of heavy investment in streaming, the company has implemented more cost controls and fine-tuned its approach. It is now betting that Disney+ is the best way to centralize its portfolio of sports, news, movies and TV shows.

“It’s going to be the portal into all things Disney,” finance chief Hugh Johnstonsaid of Disney+ in a Wednesday CNBC interview. Johnston said customers want simplicity.

Disney and other legacy media companies have had to build streaming businesses from scratch, while contending with the challenges of cord-cutting. Meanwhile, Netflix has established itself as the dominant global streamer and is now increasingly adding live programming.

Disney plans to add new live sports shows that will be exclusive to Disney+, including a daily episode of popular show SportsCenter. Disney plans to launch a new ESPN direct-to-consumer service early this fall, which will also be available on Disney+.

Hulu and ESPN tiles added to Disney+ have encouraged more subscriber engagement, the company said.

Price increases during the period buoyed its streaming revenue and Disney+ lost fewer customers from the price hike than expected. The company’s two biggest streaming services, Disney+ and Hulu, had 178 million paid subscribers at the end of December, up from 177.3 million at the end of the prior quarter.

Disney, Fox and Warner in January called off a separate planned sports streaming joint venture called Venu Sports in the face of legal challenges. Exiting that venture is likely to lead to a $50 million hit to Disney’s sports operating income in the current quarter, the company said.

Earlier this year, Disney agreed to combine its Hulu + Live TV streaming service with sports-focused Fubo TV, ending Fubo’s litigation over the formation of Venu.

Disney shares rose 1.5% premarket and are up 17% in the past year.

Companywide revenue increased 5% to $24.7 billion in the quarter ended Dec. 28. Net income climbed 34% to $2.6 billion.

Disney’s studio business reported a profit of $312 million compared with a $224 million loss a year earlier, helped by “Moana 2,” which has grossed more than $1 billion since its release late last year.

Hurricanes Milton and Helene dinged the performance of Disney’s Experiences unit, which is home to its theme parks and cruises. Milton led to a one-day closure of Walt Disney World Resort and the cancellation of a cruise itinerary.

Experiences’ income of $3.1 billion for the final three months of 2024 was relatively unchanged compared with the prior-year period.

Disney had previously said it expects operating income in the Experiences division to grow by 6% to 8% in its 2025 fiscal year, with most of that growth coming during the second half.

Cord-cutting continues to challenge legacy TV businesses industrywide but Johnston said Disney is happy with the assets it has. Operating income for Disney’s traditional TV business declined 11% to $1.1 billion. Its domestic business fared better, with operating income for the final quarter flat year-over-year.

Write to Isabella Simonetti at isabella.simonetti@wsj.com