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Disney managed to achieve a rare feat as a legacy media company by turning a profit with its streaming service, Disney+, and Hulu. However, despite this success, Wall Street was not satisfied, causing Disney’s shares to drop by more than 9%, marking the company’s worst stock trading day in 18 months. While Disney’s streaming properties were able to generate $47 million in profit, ESPN+ continued to lose subscribers and money, resulting in a combined streaming loss of $18 million, a significant improvement over the $659 million loss reported in the previous year.

Despite the improvement in streaming profitability, investors reacted negatively to Disney’s projected slowdown in entertainment streaming growth in the next quarter. Disney stated that it still anticipates the combined streaming business to achieve profitability by the end of its fiscal year in September. However, sustaining profitability in the competitive streaming market is a challenge that Disney will need to navigate. The company is facing an unexpected shift in its business model, transitioning from traditional cable TV to streaming in order to stay competitive with tech giants like Apple, Amazon, and Netflix.

Streaming represents a new and challenging landscape for media companies like Disney, who have traditionally relied on cable TV for profits. The decline in cable subscriptions has forced companies to adapt to the streaming model to retain audiences and remain competitive. The lower profit margins in streaming present a new challenge for companies who have built their businesses on the traditional cable model, requiring them to accept and adapt to a changing media landscape. For Disney, streaming is just one of many challenges they are facing, including box office flops, layoffs, and shareholder drama, as CEO Bob Iger navigates an ambitious turnaround strategy and plans for his successor.

Disney’s recent market reaction indicates that Wall Street has concerns about the company’s earnings in the upcoming quarters. While the boardroom battle is behind them, investors are now focusing on Disney’s financial results and the sustainability of profitability in the streaming business. As Disney continues to face challenges in the evolving media landscape, the company will need to adapt and innovate to maintain its position in the market. Overall, Disney’s foray into streaming marks a significant shift for the legacy media company, as it competes with tech giants and other streaming services to capture and retain audiences in an increasingly digital world.

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