Disney's Streaming Expansion: ESPN DTC Launch and Hulu Integration to Boost Ad Revenue and Engagement

Disney's Q3 2025 revenue increased 2% YoY, driven by growth in its direct-to-consumer streaming business. The company announced the launch of its ESPN DTC service on Aug. 21, featuring NFL Network and WWE's Premium Live Events. Disney also plans to integrate Hulu into Disney+ in 2026, aiming to increase engagement, efficiency, and ad revenue through scale, signal, and simplicity in the streaming ecosystem.

The Walt Disney Company reported its third quarter earnings for fiscal 2025, with total revenue reaching $23.7 billion, a 2% increase over the same period last year. The company's direct-to-consumer streaming business drove much of this growth, contributing to a strong performance in the quarter.

Disney's CEO, Bob Iger, highlighted the company's strategic priorities, including the upcoming launch of ESPN's direct-to-consumer streaming service on August 21. The service will include multiple pricing tiers starting at $11.99 per month and can be bundled with Disney+ and Hulu. Disney also announced plans to integrate Hulu into Disney+ in 2026, aiming to increase engagement, efficiency, and ad revenue through scale, signal, and simplicity in the streaming ecosystem [1].

The Experiences segment, which includes theme parks, Disney Cruise Line, and consumer products, generated $9.1 billion in revenue for the quarter, an 8% increase over Q3 2024. Domestic parks and experiences led the growth with $1.7 billion in operating income, a 22% increase year over year, driven by higher per-capita guest spending, stronger ticket yields, and increased hotel occupancy at Walt Disney World and Disneyland Resort [1].

The streaming segment posted $346 million in operating income for the quarter, reversing losses seen in prior years. Total global subscribers rose to 183 million, with Disney+ adding 1.8 million new subscribers and Hulu gaining 900,000. Revenue for the segment increased 6% to approximately $6.1 billion, driven by price adjustments and improved subscriber retention [1].

The Entertainment segment experienced a 15% decline in operating income, totaling just over $1 billion. The drop was attributed to a lighter theatrical release schedule and reduced licensing performance compared to last year. In contrast, the Sports segment posted a 29% increase in operating income, also reaching around $1 billion. The improvement came from favorable comparisons, stable domestic ad revenue, and growth in sports rights value [1].

Looking ahead, Disney plans to launch its new ESPN direct-to-consumer streaming service on August 21, with a distribution deal with Charter Communications expected to add more than 10 million new Disney+ and Hulu customers. For the full fiscal year, Disney raised its adjusted earnings per share forecast to $5.85, an 18% increase from 2024. The company now expects its streaming business to deliver $1.3 billion in operating income for the year [1].

The earnings news caused Disney’s shares to fall 3% at market open Wednesday, reflecting mixed quarterly results and the company's focus on future growth opportunities [2].

References:

[1] https://www.wdwinfo.com/news-stories/disney-q3-2025-earnings-theme-parks-lead-the-way/
[2] https://www.emarketer.com/content/disney-plans-streaming-sports-shakeup-after-mixed-quarter