The Walt Disney Company’s disappointing results on Wednesday revealed ongoing problems with its streaming business, providing further evidence that the streaming wars and the battle for customers are now making it a tougher business. On Thursday, Disney shares fell nearly 9% in reaction to the company’s results and the inability to make streaming a profitable business so far. As part of its push to reduce operating losses in its streaming business, Disney DIS, -8.73% said it will remove some content from its streaming platforms and, going forward, produce lower volumes of that content, which is the most expensive element. The streaming business. In the second quarter, Disney narrowed its operating loss in its direct-to-consumer business to $659 million, down from $887 million in the year-ago period, thanks to strong results at Disney+ and ESPN+. Those improvements were partially offset by lower operating income at Hulu. Disney’s higher content costs reflect the content cost problems that have plagued Netflix Inc. NFLX, +2.78% suffered as it moved into content streaming and emphasized its mail-order DVD business. “It’s important that we rationalize the content we’re making and what we’re spending to make our content,” Disney Chief Executive Bob Iger told analysts on a call late Wednesday. Disney also said it would raise the price of its ad-free version of Disney+, and that it would roll Hulu content into the streaming service, as part of efforts to unify its business and create a one-app experience for consumers. Netflix has also gone all-in on a low-cost, ad-supported service, something its co-founder and now chairman Reed Hastings said for years the company would never do. And Netflix has also raised prices, as its subscriber growth stalled during the pandemic ground to a halt in the past year. On Wednesday, Barclays analyst Tim Long said in a note that Apple Inc. AAPL, +0.11% will lose billions of dollars on its streaming service, Apple TV+, and its increased spending on content will drain cash from its latest $90 billion in stock. Buyback Scheme. Streaming has evolved from a low-cost service to ad-supported services, less content, and now, at least with Netflix, accounts that cannot be shared with non-family members. The streaming business is starting to look less fun for consumers and more expensive for the players involved in this streaming war, as each company continues to spend billions to stay in it. Also Read: Before the DeSantis takeover, Disney’s board banned tattoo parlors, liquor stores, adult entertainment
