Josh D’Amaro rose to the top of the Walt Disney Co. by turning its theme parks into the envy of the world. Now he needs to perform a similar trick with the company’s streaming services.
D’Amaro has instructed his leadership team to think of Disney+ as the front door for the company’s fans worldwide. Disney+ is introducing new features, like a better recommendation algorithm and vertical videos, which it says will close the technological gap with Netflix Inc. and YouTube and persuade users to spend more time within the app. The company is integrating programming from Hulu and ESPN to bring its full complement of movies, TV shows and live sports into one place. Disney also plans to increase its investment in local programming in markets like South Korea so international viewers have more reasons to sign up.
Improving the performance of the streaming business is D’Amaro’s best shot at lifting Disney’s stagnant share price, according to Rob Fishman, an analyst at MoffettNathanson. Shares in the Burbank, California-based entertainment giant have fallen more than 40% over the last five years, including about 13% in 2026.
Disney’s approach to streaming has confounded investors, who worry that the services will never replace the money the company once made from cable networks. The company’s services haven’t increased their share of US domestic TV viewing in three years, ceding ground to rivals that include Amazon and free-to-watch services. Overseas, Disney’s sites have a much smaller footprint than at home. Earlier this month, Wells Fargo analyst Steven Cahall recommended the company get out of the streaming business altogether.
A recent overhaul of the streaming operations has begun to pay dividends, according to Adam Smith, chief product and technology officer for Disney Entertainment and ESPN. Time spent on Disney+ in the US is up 21% from a year ago and Disney’s streaming services registered their best month of viewership ever in the US in March, according to Nielsen.
“We’ve been fundamentally revamping our approach,” said Smith, who runs Disney’s streaming services alongside Joe Earley. “We’ve made great strides in changing and evolving the experience.”
While its streaming services have the potential to be the best in the business, MoffettNathanson’s Fishman said the company “needs to give investors something to be excited about and go execute on it.”
Erasing $4 Billion in Losses
As the number of people who paid for cable started to slip a decade ago, Disney’s then-CEO, Bob Iger, made streaming the company’s top priority. Iger spent more than $70 billion to buy entertainment assets from Fox and billions more to hire engineers and fund programming for Disney+.
This spending, which brought in an enormous content library and production pipeline, enabled Disney to manage the transition from cable to streaming better than any other legacy media company. Disney+ attracted more than 10 million customers on its first day in November 2019. When the service eclipsed 100 million subscribers in less than two years, shares in the company hit an all-time high.
Yet while Wall Street had encouraged Disney to sacrifice short-term profits to focus on signing up customers, sentiment changed in 2022 when Netflix reported a surprising loss of subscribers. Companies were hemorrhaging cash to invest in streaming at the same time their TV networks were shrinking. Investors started to question the decisions made by Iger and his successor Bob Chapek.
Why had Disney taken on so much debt to buy the entertainment businesses from Fox? Had the company ruined the Star Wars franchise by making too many TV shows? Should Disney even still own ESPN given the rising cost of sports rights?
When Dana Walden and Alan Bergman took charge of Disney’s entertainment division in February 2023, the company’s streaming service had just lost about $4 billion in the previous fiscal year. Under pressure from activist investor Nelson Peltz, Walden and Bergman cut back on programming, reducing the number of shows Disney commissioned by almost 50% between 2022 and 2025, according to Ampere Analysis.
They also raised prices, nearly tripling the cost of Disney+, while introducing a cheaper option with ads for those who don’t want to pay more. In just three years, the company turned that $4 billion-loss into a profit.
“We went from losing a lot of money to building a service that represents the potential of the Walt Disney Company,” Walden, Disney’s president and first-ever chief creative officer, said in an interview. “That’s not to say we don’t have a lot of room to grow, but after three and a half years, I feel great about what we’ve accomplished.”
Getting finances in order at the streaming services was just one part of the turnaround plan. Subscriber growth had slowed to a crawl while streaming’s share of total TV time plateaued at about 5%. Disney owns one of the most beloved collections of studios and intellectual property in the world — including Pixar Animation Studios, Marvel Studios and Lucasfilm, and franchises from Star Wars to Disney princesses and Toy Story — but it struggled to prove that to potential customers.
The company needed to erase a steep technical deficit. Netflix and YouTube had spent 20 years building the industry’s leading streaming products. Disney’s various streaming services weren’t even on the same technology stack, using the same programming language, databases and software tools, for years. “We need to be at their level,” Iger said in 2024. He then hired Smith, who has spent the last two years overhauling the streaming service and hiring a new team.
One Disney
D’Amaro has pushed the company to embrace the concept of One Disney. When Disney+ first launched, there was a perception it was just for families and kids — a place to go for Disney classics like Cinderella or Frozen. Hulu, which Disney once co-owned with Fox, was where you went for edgier general entertainment programming, while ESPN was the destination for sports. Smith and Earley are working to teach their customers that Disney+ is the place to watch not just Bluey and The Mandalorian but also The Bear and the NFL.
“Disney+ is for everyone,” Earley said. This has been true outside the US for years.
Smith and Earley have integrated Hulu customers’ viewing history into Disney+ so the app can recognize what those subscribers do and don’t like. Viewers won’t lose anything by watching a show from FX on Disney+ instead of Hulu. Disney has also prioritized convincing customers to buy a bundle of Disney’s services. That’s a big reason the company’s churn, or cancellation rate, sits at just 3% in the US, according to Antenna, the second best in the industry after Netflix.
Disney chafes at the notion that its programming is insufficient. Disney is second only to YouTube in share of TV time if you combine its TV networks and streaming services. Though it doesn’t release nearly as many original hits as Netflix, Disney has four of the 10 most-watched streaming series this year thanks to Bluey and reruns of Family Guy, Bob’s Burgers and Grey’s Anatomy. It also operates the most successful movie studio in the world, producing hits like Toy Story 5, The Devil Wears Prada 2 and Hollywood’s top-grossing film last year, Zootopia 2.
The biggest opportunity for growth in Disney’s streaming services is abroad. Disney has long operated in the classic Hollywood model, exporting its programming to the world. Franchises like Marvel and Pixar are popular everywhere. But there is a limit to how big a streaming service can get in many markets without local programming. Both Netflix and YouTube have tapped into local programming to great effect.
Walden has put Eric Schrier in charge of building out the pipeline of local-language shows that can complement Disney’ global franchises. Disney plans to double its budget for local-language programming over the next few years. It’s also bidding on more rights to sports in markets like Latin America and Australia.
“We have a clear growth strategy, and it starts with great storytelling,” Walden said. “That means increasing our content spend, particularly outside the US, while significantly expanding our creative output over the next several years.”
D’Amaro imagines one day the Disney+ app will be a hub not just for entertainment but for all things Disney — a place to buy tickets to the theme parks or toys. But first he needs to get fans to spend more time watching its TV shows and movies.
Shaw and Buckley write for Bloomberg.
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