Disney is planning a splashy debut for its branded streaming video service launching later this year. But the current reality of Disney’s push into streaming is marked by some massive financial losses.
The company submitted a new 8K filing with the SEC to provide financial information regarding its recently formed Direct-to-Consumer and International business segment. For the fiscal year ending on Sept. 30, 2018, both Hulu and BAMTech helped contribute to losses totaling more than $1 billion.
Disney said Hulu was the primary reason the company posted a $580 million loss in equity investments. The company said the higher losses at Hulu were driven by higher programming, labor and marketing costs, partially offset by growth in subscription and advertising revenue.
Disney currently owns 30% of Hulu but will own 60% when its $71.3 billion deal for 21st Century Fox is completed. Hulu announced earlier this month that it now has more than 25 million subscribers.
Disney said its DTC businesses lost $469 million in the fiscal year ending Sept. 30, 2018. Those losses were driven primarily by BAMTech, the streaming tech company that built ESPN+ and is working on the upcoming Disney+ streaming service.
“Our top priority is fully leveraging our global brands and great content to create world-class direct-to-consumer entertainment,” said Bob Iger, chairman and CEO at Disney, in a statement. “We have the structure and management in place to drive growth in our DTC business, and our acquisition of 21st Century Fox further enhances our ability to deliver significant value to consumers and shareholders.”
Disney is currently busy producing an original content lineup for its Disney+ service. That lineup will include animated and live-action series and films based on franchises from Disney, Star Wars, Marvel and Pixar.
Disney will discuss its direct-to-consumer business in further detail when it holds an investor day on April 11. The company plans to offer a demonstration of Disney+ and a look at some of the original content being created for the new streaming service.