The Walt Disney Co. has announced plans to merge its Disney+ and Hulu services into a single app. The move comes as the company seeks to streamline its streaming offerings and attract more subscribers to its platform.
Despite losing four million streaming subscribers to its Disney+ service, Disney reported higher earnings and revenue in its fiscal second quarter, thanks in part to the ongoing strength of its theme parks and an improving streaming business. The company’s shares fell 4.5% in after-hours trading, however, as investors reacted to the subscriber loss.
Disney CEO Bob Iger has been working to turn around the company’s streaming business since returning to the CEO post in November. He has also been focused on ensuring that the company’s financial strength, which comes in part from its theme parks, remains intact.
The company has been engaged in a “strategic reorganization” aimed at trimming costs and improving performance. As part of this effort, Disney is targeting $5.5 billion in cost savings across the company and has been working to trim about 7,000 jobs.
In its fiscal second quarter, Disney earned 93 cents per share, meeting analysts’ expectations. Revenue rose 13% to $21.82 billion, in line with Wall Street’s forecast. Sales at its parks, experiences, and products division rose 17%, while revenue for the unit housing its movie business climbed 3%.
Disney lost 4 million subscribers to its Disney+ service, ending the quarter with 157.8 million paying subscribers. Hulu subscribers were essentially flat at 48.2 million.
The company’s decision to combine its Disney+ and Hulu services into a single app is expected to make it easier for customers to access content and could help boost subscriber numbers. However, it remains to be seen whether the move will be enough to counteract the impact of increasing competition in the streaming market.