Disney is set to launch a combined app for Disney+ and Hulu by the end of the year, aiming to consolidate content from its direct-to-consumer (D2C) services.

Although the company has managed to reduce its streaming losses in the second quarter of 2023, subscriber declines remain a challenge.

During the second quarter earnings call, CEO Bob Iger announced the plans to integrate Disney+ and Hulu content into a single streaming app, describing it as a “logical progression” of their DTC offering.

However, Disney+, Hulu, and ESPN+ will still be available as standalone services for customers.

Bullish on general entertainment

Iger further stated that the company will be streamlining the quantity and investment in its streaming content, and hinted at upcoming price increases for its DTC services.

This strategic move indicates Disney’s efforts to optimize its streaming offerings and strengthen its position in the market.

During the same earnings call, CFO Christine McCarthy disclosed that Disney is planning to remove certain content from its streaming services.

This is as part of a review aimed at aligning with the company’s strategic changes in content curation. This adjustment is expected to result in a content impairment charge ranging from $1.5 billion to $1.8 billion.

McCarthy emphasized that Disney intends to produce lower volumes of content moving forward to align with this strategic shift.

The company’s decision reflects a refined approach to content selection and production as it continues to adapt to the evolving streaming landscape and prioritize content that best resonates with its audience and business objectives.

During the earnings call, Iger also shared positive updates regarding Disney’s discussions with Comcast regarding. The acquisition of its one-third stake in Hulu. He described the conversations as “cordial” and “constructive.”

Meeting expectations for Disney

Previously, in March, Iger had mentioned that Disney was considering the possibility of gaining full control of Hulu but wanted to assess its potential before making any decisions.

Addressing the topic again during the call, he informed investors that he had spent an additional three months carefully studying the situation to determine the optimal path for growing the business.

Iger reiterated that during his initial earnings call after his return, he had stated that “everything was on the table.” Now, with further analysis and consideration, Disney aims to make informed decisions about the future of Hulu. It determine the best course of action to drive the platform’s growth.

The recent announcements were made in conjunction with Disney’s Q2 2023 results, which showed a reduction in streaming losses by approximately $200 million in the last quarter. However, the company’s subscriber numbers continue to decline.

Disney+’s flagship show, The Mandalorian, concluded the quarter on April 1st with a 2% decrease, totaling 157.8 million global subscribers. This reflects a decline of 4 million subscribers compared to Q1’s figure of 161.8 million.

The largest decline was observed in the Indian OTT service, Disney+ Hotstar, which experienced an 8% decrease in subscribers.

Wall Street analysts had predicted a slight increase of less than 1% to reach 163.17 million subscribers. Among the losses were approximately 600,000 subscribers from the United States.

However, Disney’s direct-to-consumer (DTC) losses were lower than expected. During Q2, Disney reported a loss of $659 million, performing better than the projected loss of $841 million.

Revenue for the DTC segment increased by 12% to $5.51 billion, which can be attributed to lower operating costs resulting from improved results for Disney+ and ESPN+.