Disney offers earnings forecast, reveals $580m Hulu losses

Disney has broken out its financial results for direct-to-consumer and international activities for the first time as it prepares for the launch of its Disney+ streaming service.

DTC activities on their own – principally Hulu – turned in revenue of US$1.494 billion in 2018, up 22%, but operating losses also increased from US$96 million to US$469 million, according to an SEC filing from the studio.

Disney’s “equity in the loss of investees” within DTC and international amounted to negative US$580 million for the year, which the company said was due to higher losses at Hulu, partly offset by a favourable comparison with its loss at BAMTech International the previous year.

Disney said it would provide more information about Hulu after its expected consolidation of the US streaming service. Disney is upping its stake in Hulu from 30% to 60% as a result of its acquisition of Fox’s entertainment assets.

Revenues from DTC and international activities last year amounted to US$3.414 billion out of the US$$24.5 billion reported for media networks. DTC and international activities – which currently means Disney’s investment in Hulu, ESPN’s international networks and Vice –posted an operating loss of US$738 million for the year, compared with a loss of US$284 million in 2017. Revenues for 2017 amounted to US$3.075 billion.

From Disney’s other activities in 2018, parks and resorts accounted for US$20.296 billion and studio entertainment turned in US$9.987 billion.

Disney DTC and international subscription revenues grew by 64% to US$731 million in 2018, while affiliate fees grew by only 3% to US$1.372 billion and advertising only by 1% to US$1.311 billion.

Last year, Disney valued Hulu at around US$9.26 billion in a separate SEC filing.