The Disney Streaming Losses Non-Story

by Ray Keating

News/Analysis

DisneyBizJournal.com

January 23, 2019

I swing back and forth between fascination and frustration when it comes to the number of non-story news stories that spew forth on the Internet. But it’s particularly frustrating when non-story stories are presented in serious ways, or by supposedly serious sources.

The latest non-story stories to capture my attention were a string of articles focused on losses suffered by The Walt Disney Company tied to its streaming services. For example, a CNBC article carried the titled “Disney is already losing over $1 billion in streaming, and its Netflix competitor has yet to launch.” Similarly, a piece at The Motley Fool proclaimed “Disney's Streaming Losses Are Piling Up Already.” The stories are based on an SEC filing.

Now, considering that Disney has been making investments to start up the forthcoming Disney+ service – the company’s big streaming effort to challenge Netflix and Amazon – and therefore, with no revenues obviously coming in the door yet, losses at this point are inevitable. Factor in the investments made in BAMtech, which is and will be powering ESPN+ and Disney+, losses again amount to a firm-grasp-of-the-obvious situation. For good measure, Hulu is playing catch up in the U.S. and being positioned for expansion in Europe.

So, the real story here is simply getting a better handle on the numbers – roughly $1 billion, according to the filing – at this point in time and development. It’s not a story warranting over-the-top headlines about losses, or hyperbolic content about trouble and challenges in streaming. 

Once all of Disney’s streaming services – Disney+, ESPN+ and Hulu – are fully operating in the Disney universe, then we can talk seriously about growth, revenue and profitability. For now, the Disney streaming story is still about investments in content and technology, pricing, and strategy for launching and bringing about profitability. 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with the three latest books being Reagan Country: A Pastor Stephen Grant Novel, Heroes and Villains: A Pastor Stephen Grant Short Storyand Shifting Sands: A Pastor Stephen Grant Short Story. He can be contacted at raykeating@keatingreports.com.