On the 20th of January, 2019, Disney faced a huge loss in the last fiscal year due to Hulu. The loss was a hefty amount, $580 million to be exact.
Disney is definitely a well-known streaming media business among the many streaming services. Disney, as we all know, has a 30 % stake in Hulu, came across this loss according to an SEC filing.
The Disney & Hulu related SEC Filing –
This was, the SEC filing states, “primarily due to a higher loss from our investment in Hulu, partially offset by a favorable comparison to a loss from BAMTech in the prior year.”
BAMTech is the streaming technology that powers ESPN+ and other services. In total, streaming accounted for more than $1 billion in losses for Disney last fiscal year.
More Insight –
The following is the segment reporting changes in the SEC filing –
Effective for the first quarter of fiscal 2019, the Company is making two changes to its reporting of segment operating results.
First, the Company will report the following segments:
- Media Networks;
- Parks, Experiences & Consumer Products;
- Studio Entertainment; and
- Direct-to-Consumer & International (DTCI)
The Parks, Experiences & Consumer Products segment reflects the combination of the former Parks & Resorts and Consumer Products & Interactive Media segments. Certain businesses that were previously reported in Media Networks, Studio Entertainment and Consumer Products & Interactive Media are now reported in DTCI.
Second, we will change the reporting for intersegment content transactions from “net” to “gross” as we expect our Studio Entertainment and Media Networks segments will provide significant amounts of content to our DTCI segment. We believe “gross” reporting will facilitate comparability with peer studio and television companies and provide useful information regarding the investment in our direct-to-consumer businesses.
Additional Disney related news –
Disney has yet to release its own streaming service, Disney+, which is slated for late 2019. Disney is also planning to increase its investment in Hulu, focusing more on original content and international expansion.
As part of Disney’s buyout of 21st Century Fox, Disney will soon own another 30 % of Hulu. If the business goes similarly for Hulu this fiscal year, that will only increase Disney’s losses.