The numbers
7%— Disney revenue increase in Q2 to $25.2 billion vs. year-over-year quarter.
13%—SVOD revenue growth, up 2% from the previous quarter, with growth from improved monetization.
14%—Growth for Disney Entertainment subscription and affiliate revenues compared to the prior-year quarter, with Fubo contributing 5%.
27 million—ESPN Men’s Tournament Challenge brackets completed, up 7%.
The watercooler talk
In his first earnings call as Disney CEO, Josh D’Amaro laid out how Disney+ is the “digital centerpiece” of the company. The CEO noted the company made “meaningful progress” on the platform in the quarter and is benefiting from the integrated Hulu and Disney+ experience as it looks to reduce churn.
Specifically regarding AI, the company is developing a “hyper-personalized recommendation engine” across Disney+ and ESPN. The company is also implementing AI to enhance ad targeting capabilities and let partners develop “dynamic brand messaging.” D’Amaro said the company is committed to integrating AI in a way that keeps “human creativity” at the center of what the company creates. He added that AI can make production more efficient and improve the amount of content Disney produces.
Moving forward, D’Amaro said the company is focusing on a more connected Disney experience across streaming, sports, games, and experiences, with Disney+ tying it together. The company is focused on making Disney+ a visual homepage, adding improvements to reduce friction, create more intuitive discovery, and help users decide what to watch sooner. For example, subscribers in the U.S. can now preview shows and movies with clips to help choose a program without having to click. Disney also added its Verts vertical video on Disney+ in March.
“The roadmap runs from near-term streaming optimization and content investment through medium-term interactivity, things like vertical video, personalized ESPN, the park’s AI work, all the way to a longer-term single point of contact with our fans that drives lifetime value across everything that we’re doing. The through line here is going to be the same: Own that fan relationship,” D’Amaro said.
The key quote
“Digital centerpiece means Disney+ becomes the primary relationship between Disney and its fans, the place where everything comes together: entertainment, sports, experiences. All that converges. So it’s less about a product. It’s a strategic posture, essentially.” — Disney CEO Josh D’Amaro
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