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Disney Reaches 5 Million Streaming Subscribers

As Robert A. Iger approaches the first anniversary of his return as chief executive of the Walt Disney Company, he delivered a strong earnings report on Wednesday, telling investors the company added roughly 5 million subscribers to its streaming services in the last three months.

In a statement, Mr. Iger acknowledged that Disney still had “work to do,” but highlighted the company’s “significant progress” over the last year in reorganizing itself.

“These efforts have allowed us to move beyond this period of fixing and begin building our businesses again,” Mr. Iger said.

The results, for services including Disney+, Hulu and ESPN+ could help Disney stave off Nelson Peltz, an activist investor who has been pushing the company to come up with a plan to replace Mr. Iger, improve the profitability of the streaming services and reinstate the company’s dividend.

The company said its profits jumped to $694 million in the third quarter, from $254 million a year ago. One bright spot was Disney’s experiences division, which includes parks and cruises. Its operating profit grew 30 percent from the same period a year ago.

The company also narrowed losses for its streaming services, thanks partly to price increases at Disney+ and Hulu and lower marketing and technology costs. The addition of seven million subscribers to its Disney+ service helped offset losses elsewhere.

Disney is at a crossroads. Mr. Iger, the up-before-dawn face of the company, has shown a willingness to shake up the company’s traditional structure since he returned last November. He said in an interview this year that the business model supporting Disney’s businesses like the broadcast network ABC was no longer working, a noteworthy acknowledgment from a former weatherman who rose through the ranks of the company’s TV business.

“The distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years is definitely broken,” Mr. Iger said during an interview with CNBC at the annual Sun Valley mogul gathering. “And we have to call it like it is.”

Since then, Disney has pursued selling a stake in ESPN — potential buyers include the National Football League and the National Basketball Association — and there have been reports that the company is also exploring options for ABC, which has been synonymous with the company for decades. Disney also announced that it planned to buy out Comcast’s stake in Hulu for $8.61 billion, a long-expected move that distances the company from traditional TV and increases its bet on streaming.

Disney has been battling those headwinds while navigating twin strikes that brought Hollywood to a standstill. The Writers Guild of America and SAG-AFTRA, the union that represents roughly 160,000 actors nationwide, each went on strike this year, demanding, among other things, higher wages and the ability to participate in the success of streamed films and TV shows. Mr. Iger was among a group of executives who helped broker a deal with the writers, but the actors remain on the picket lines.

Media conglomerates like Disney spend billions of dollars on TV shows and films every year, and the strikes allowed them to husband their cash while the cameras were off. But some, like Warner Bros. Discovery, have also told investors that the strikes will hurt future profits, emptying out the pipeline of shows and movies to sell.

Disney has changed the way it reports results to investors in recent months as it re-evaluates its business. In October, after Mr. Iger announced Disney was exploring options for ESPN, the company broke out operating results for the sports division for the first time, telling investors it generated about $1.89 billion in profit in the nine months leading to July.

Disney’s new reporting segments have a “sports” unit that includes ESPN, an “experiences” segment that includes theme parks like Disneyland, and an “entertainment” unit that includes the Disney+ streaming service, Hulu and its traditional TV networks.

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