We’d really like to know what the hell is going on over at Disney. For a company that is as omnipresent and historic as they are, they’ve made a lot of questionable calls. We’ve been talking about some of them recently. For example, there’s the strange decision to cancel Wonder Man before its second season started production. Not so strange until you recall they had already greenlit it. What about that live-action Moana remake? How the hell do you spend $250 million on that? There are a lot of moving parts over there and at least one of them is turning out well, but it doesn’t seem to be enough.
Streaming is Doing Really Well
Disney has a few big streaming services to their name but the two main ones are Disney+ and Hulu. They’re going to combine together in the future but for now, they’re doing quite well. Over the last quarter their revenue was up 11% at $5.53 billion. Meanwhile, operating income reportedly more than doubled from the same quarter last year. It went to $712 million from $329 million. To top it all off, the overall streaming subscription revenue was up 15%. All of that amounts to a pretty big deal. Especially when competing streaming platforms have struggled to be consistently profitable.
This news comes a month after a pretty big round of layoffs. Oh, and there were more layoffs even before that. Much of this was put into play when Bob Iger returned to Disney as its CEO from 2022 to March of 2026. Iger saw a lot of excess and projects that were focused on quantity instead of quality. There was some truth to that, but what projects and people were put on the chopping block? Is that one of the unofficial reasons why Blade never got made? We discussed possible reasons for that in another article. The current CEO, Josh D’Amaro seems to be pretty focused on cutting more costs.
More Cuts to Come
In a recent letter to shareholders, D’Amaro stated that Disney remains, “highly focused on reducing costs across the enterprise to create incremental capacity to invest for growth and are evaluating a variety of levers, including reductions in labor and SG&A.” SG&A stands for selling, general, and administrative expenses. He also stated that the company is “mid-stream in this work.” In other words, more layoffs could be on the way. And the line about “reducing costs” to “create incremental capacity to vest for growth” is just corporate speech. He’s saying they want to find the weak points, cut them out, and double down on what they think is working.
Does Disney really know what’s working though? You’d think they would, but when you layoff a bunch of people across different lines of your business, maybe you don’t. That sounds more like an attempt to reduce expenses instead of using your resources more productively. Not to keep harping back on Moana and Blade, but it really seems like one of those should’ve had more resources put into making it than the other. At least the King of the Hill reboot on Hulu is working out well. No wonder the streaming revenue is up!
We’ll have to see what Disney has in store for the future. What other moves are they going to make? Can they ride this success into Q4 and the end of year? As always, we’ll let you know of any shakeups or happenings as we continue to keep our eyes on Disney.
