Walt Disney Co. is luring users to its ESPN+ sports streaming service, but it's coming at a steep cost.
The company said in its fiscal first-quarter earnings report on Tuesday that ESPN+, which launched last year, has 2 million paying subscribers, double the number from five months ago. For $5 a month, customers get a selection of live baseball, soccer and hockey games as well as UFC fights and original content like "30 for 30" documentaries.
"We expect the expansion of combat sports content on the streaming service to drive continued growth in the months ahead," Disney CEO Bob Iger said on the earnings call with analysts.
However, streaming remains a money-losing business for Disney, which is experimenting with a number of ways to take on Netflix and the rest of the cord-cutting universe. The company said that its direct-to-consumer and international segment lost $136 million in the quarter on revenue of $918 million.
Hulu, the streaming entertainment service in which Disney owns a stake, is a big part of that business. Iger said "the goal is obviously to operate Hulu profitably," but the company isn't saying how long that will take. Later this year, Disney is rolling out its Disney+ service, providing subscribers with new shows, movies and animated content.
Overall, Disney reported revenue of $15.3 billion and earnings of $1.84 a share, beating analysts' estimates on both. Investors want to know that as more audiences move to mobile and over-the-top viewing, Disney can eventually make money from ESPN+, Disney+ and Hulu.
"Ultimately our goal would be to use the same tech platform to make it easier for people to sign up to all three should they want to use the same credit card, same username, same password, etc.," Iger said on the call. In buying all three, the company "would give them an opportunity potentially at a discount or two for that matter," he said.