Why Disney+’s surge in profit is a warning for streaming rivals
“I’ve been negative for several years now on SVOD,” the media analyst Ian Whittaker told The Media Leader‘s Year Ahead event in January.
“I just don’t think the market penetration is there for them and I think what you will see in 2024 is this flatlining coming through and it will be hard to see further penetration.”
Television is good at telling stories that defy expectations, often with a twist. So it was for Disney+, which celebrated its five-year anniversary last week by announcing a surge in profitability in the third quarter of 2024.
This stands in stark contrast to the state of UK broadcasters, which are enduring a gnarly 2024 as linear ad revenues shrink and digital income grows at a slower rate.
Yes, Disney’s streaming service is a part of a multipronged global operation backed by a century-old American giant with an embarrassment of IP riches. But that’s the point of the streaming wars: time spent watching a Marvel movie on a smartphone is considered “TV time” as much as settling in with the family to watch Coronation Street on ITV.
So when Disney+ reports a $253m profit in its direct-to-consumer business, as it did in its Q3 earnings release, it’s a sign that the house that Walt built has turned a digital corner.
As The Media Leader reported 18 months ago, all major streaming challengers to Netflix were then running at a loss. Netflix itself only began reporting significant annual profits in 2017.
