Earnings Surge from Streaming Services and Amusement Parks for Disney
Disney's cable TV business is facing challenges as the industry shifts towards streaming. The company's linear networks, such as ESPN, National Geographic, and Freeform, have seen declines due to accelerating cord-cutting trends. In the fiscal third quarter of 2025, Disney's operating income from its linear networks segment dropped 14% year-over-year, mainly because of reduced advertising revenue linked to lower viewership and decreased ad rates [1].
In response, Disney is redefining its position by viewing itself broadly as "in the television business" rather than strictly cable or streaming. The company aims to provide content wherever customers want it, including streaming options integrated with traditional distribution [1][2]. A key strategy includes the planned merger of Hulu into the Disney+ platform, creating a unified streaming app to attract and retain more subscribers [1][2].
Regarding sports, Disney is focusing heavily on ESPN. The company plans to launch a new standalone ESPN service that offers all ESPN content without requiring a cable subscription. This will be the first time such comprehensive ESPN access is available as a standalone streaming product [2]. The launch of ESPN+ is Disney's response to the growing trend of streaming.
Despite the challenges in linear TV viewership, sports advertising remains strong. Disney reported nearly $4 billion in sports advertising revenue in mid-2025, indicating sports remain a core component of its media strategy [3].
In the last quarter, Disney's revenue increased by 2% to $23.65 billion. However, the U.S. cable TV business dragged down Disney's overall performance, with revenue from the American cable TV business falling 15% year-over-year to $2.27 billion [1]. Despite this, Disney's stock initially fell by over 2% in pre-market U.S. trading.
On a positive note, Disney's streaming service Disney+ has seen growth, with the number of customers increasing by 1.8 million in the last three months. This brings the total number of Disney+ customers to nearly 127.8 million [1]. The fiscal year for Disney ends in September, but there's no mention of any changes to the forecast for operating profit in this paragraph.
Disney's theme parks are thriving, but this fact was not mentioned in this article as it is not directly related to the changes in Disney's cable TV business and its move towards streaming. The company is planning to launch ESPN+ by the end of August.
Disney, with its focus on diversification, is positioning itself not just as a cable or streaming company but broadly as "in the television business". The aim is to offer content across various platforms, including streaming services like Disney+ and the planned integration of Hulu, as well as the soon-to-be-launched standalone ESPN service [1][2]. Despite the challenges in traditional finance sectors such as linear TV viewership, sports advertising remains strong within Disney's business and entertainment portfolio, contributing significantly to revenue [3].
