Disney Sees Streaming as Core Growth Platform in Q2 2025 Earnings

Disney reported a 7% year-over-year revenue increase to $23.6 billion in fiscal Q2 2025. Operating income for its direct-to-consumer (DTC) segment, including Disney+, Hulu, and ESPN+, significantly improved, jumping from $47 million to $336 million.

CEO Bob Iger emphasized the importance of streaming as a "core growth platform" during the earnings call. He outlined a plan focused on enhancing user experience, investing in content, and leveraging technology.

Improving User Experience and Ad Tech

Disney is actively integrating its streaming services to offer a wider range of entertainment and sports content. The company is also investing in local content production outside the U.S. Iger highlighted upcoming improvements to platform technology, particularly in ad tech, promising significant advancements in personalization and customization in the near future.

Strong Advertising Demand and Growth

Disney expects its advertising growth rate to surpass the initial 3% projection for the year, driven by strong demand from sectors like restaurants and healthcare. While the DTC business faces some supply-side challenges due to new market entrants, demand for advertising remains robust.

Disney's Upfront Strategy: A Four-Step Formula for Brand Success

Disney's positive earnings report builds momentum for its upcoming upfront presentation. John Campbell, Senior Vice President for Streaming, Entertainment, and Multicultural Solutions, shared Disney Advertising's four-step formula for maximizing brand integrations:

  • Identify brands that enhance viewer experience.
  • Use data to inform strategic placement.
  • Collaborate closely with creative teams.
  • Employ a "content everywhere" approach for multi-platform reach.

Successful Brand Integrations Across Disney's Portfolio

Streaming plays a crucial role in these integrations. Seventy percent of Hulu and Disney+ viewers consider purchasing products featured in ad integrations. Seventy-one percent find show integrations combined with supporting media increase their brand interest. Disney has also seen a sixfold increase in sponsorship revenue for films on its streaming platforms.

Disney has introduced new programs like Freshman Class, which integrates brands into new series from the outset, and Integrations Everywhere, which moves beyond traditional 30-second ads. The company also utilizes Screen to Stream to extend brand campaign lifecycles.

Examples of successful integrations include upcoming Hulu shows featuring brand collaborations and the return of "The Bear" with returning sponsor American Express and new sponsor Vital Farms.

The sitcom "Abbott Elementary" exemplifies Disney's integrated approach, featuring eight sponsors in its fourth season. A seamless integration with Lysol even prompted some viewers to question whether it was an ad or part of the show.

Campbell emphasized Disney's entrepreneurial creative spirit, even as a century-old company, highlighting the company's commitment to innovation in brand integration and advertising.