Categories Analysis, Leisure & Entertainment

Walt Disney (DIS): Four key areas of focus to drive growth going forward

The company expects core Disney+ subscribers in the first quarter of 2024 to decline slightly on a sequential basis

Shares of The Walt Disney Company (NYSE: DIS) stayed red on Wednesday. The stock has gained 13% over the past three months. The company concluded fiscal year 2023 on a positive note, with growth in revenue and earnings, as it continues to rebound from challenges faced over the past few years. Here’s a look at four areas the company plans to focus on to drive growth going forward:


In its last earnings report, Disney mentioned four key building opportunities that will be central to its success. The first of this is achieving significant and sustained profitability in its streaming business. At the end of FY2023, core Disney+ subscribers stood at 112.6 million, including close to 7 million subs added during the fourth quarter of 2023.

In Q4, more than half of the new subscribers in the US chose an ad-supported Disney+ product, bringing total subscriptions for ad-supported Disney+ products to 5.2 million. Disney+ Core average revenue per user (ARPU) grew by $0.12 sequentially, driven by pricing increases and higher advertising revenue.

The company expects core Disney+ subscribers in the first quarter of 2024 to decline slightly on a sequential basis due to a temporary rise in churn from the price hikes in the US. Subscriber growth is expected to rebound later in the fiscal year.

At the end of FY2023, total Hulu paid subscribers stood at 48.5 million. The acquisition of the remaining stake in Hulu from Comcast will fuel Disney’s streaming plans. In addition, the release of a combined app for all its streaming channels are expected to drive engagement and advertising opportunities as well as lower churn and reduce customer acquisition costs, thereby increasing margins. Disney expects to reach profitability at its combined streaming businesses in the fourth quarter of 2024.


The second core building opportunity is turning ESPN into the preeminent digital sports platform. In Q4 2023, revenue from ESPN rose 1% to $3.8 billion and operating income increased 15% to $953 million versus the prior-year quarter. At the end of Q4, ESPN+ had 26 million paid subscribers. Disney saw growth in ESPN viewership through the year along with stability in ad sales.

Film studios

The third is improving the output and economics of its film studios. In order to achieve this goal, the company is focusing the most on its core brands and franchises and reducing its overall output so that it can concentrate on fewer projects and improve quality. It is also working on creating fresh and compelling original IP.

Disney has several films tied to popular franchises coming out in 2024. These include Deadpool 3, Kingdom of the Planet of the Apes, and Inside Out 2. It also has movies from franchises like the Lion King, Toy Story, Frozen, Zootopia, and Avatar in development.


The final opportunity is turbocharging growth in its parks and experiences business. In FY2023, revenue in the Experiences segment increased 16% and operating income increased 23% year-over-year. Disney plans to drive growth in this segment through strategic investments over the next decade.

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