Disney's Streaming Growth Can't Outrun Its Linear TV Collapse

The Walt Disney Company's latest earnings show a company at a crossroads, where strong streaming profits and subscriber gains are being overshadowed by the accelerating collapse of its traditional television business.

• Streaming's surge: The direct-to-consumer division was the undisputed hero, generating $352 million in operating income. Disney+ pulled in nearly 4 million subscribers while Hulu netted nearly 9 million, bringing their combined total to nearly 200 million. A wholesale distribution deal with Charter supercharged Hulu's growth, a key detail first reported by sources like Variety. Adopting Netflix's playbook, Disney also announced it will stop reporting subscriber numbers.
• The linear freefall: The success in streaming couldn't mask the damage elsewhere. Revenue from traditional TV networks plummeted 16% and operating income cratered 21%. The company blamed the collapse on accelerated cord-cutting and a weak ad market. The tension is underscored by a bitter carriage dispute with YouTube TV that has left millions without ESPN and ABC for weeks.
• The reliable powerhouse: Meanwhile, Disney’s Experiences division continues to be a stable growth engine. The segment’s revenue climbed 6% to nearly $8.8 billion and helped it deliver a record $10 billion in operating income for the full fiscal year, proving the enduring appeal of its theme parks and cruises.

Disney is betting its future on streaming and experiences, doubling its share repurchase target to $7 billion and raising its dividend. The moves signal a clear strategy: harvest cash from the declining linear business to fuel the growth engines of tomorrow.

• Also on our radar: In other news, CEO Bob Iger is outlining plans to evolve Disney+ into a "super app" for booking cruises and park tickets. The company is also making moves to shed legacy assets, taking a $450 million impairment charge on its A+E Networks investment while exploring a sale. And as its linear sports channels face carriage battles, Disney is pushing forward with its new standalone ESPN streaming service.