🍿 Streamers Grow Up
The media story shifts to profitability
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📺 Streaming’s coming of age
For years, media companies treated streaming like a land grab. That era is ending.
Streaming is starting to look like a mature business. Disney reached a 13% streaming margin, Paramount hit 15%, and Warner Bros. came in at nearly 17%. Subscriber totals matter less than churn, pricing, engagement, and how much profit each viewer can generate.
Meanwhile, the businesses streaming is replacing keep shrinking. Warner’s Networks revenue fell 17%. Paramount’s TV Media declined 9%. Cord-cutting and weaker advertising continue to eat away at linear TV.
Paramount’s Warner Bros. deal has cleared most international regulators, but a US antitrust fight has pushed the timeline into 2027. The longer it drags, the more expensive the deal becomes.
Can streaming profits grow fast enough to outrun the decline of the old bundle? And how expensive could the merger delay become?
Today at a glance:
🏰 Disney: Parks Answer the Doubters
🎥 Warner: Box Office Whiplash
⛰️ Paramount: Stronger Before the Storm
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🏰 Disney: Parks Answer the Doubters
Disney’s fiscal year ends in September, so the June quarter was Q3 FY26.
📸 Big picture: Revenue rose +7% Y/Y to $25.2 billion ($0.2 billion miss), while adjusted EPS jumped +28% to $2.06 ($0.21 beat). Total segment operating income rose +21% to $5.6 billion, ahead of expectations. Disney maintained its FY26 outlook for ~12% adjusted EPS growth and raised its buyback target again to at least $9 billion.
📈 Streaming margin expands again: Disney+/Hulu revenue grew +11% to $5.5 billion, while SVOD operating margin reached 13%, extending last quarter’s profitability inflection. Disney remains on track for double-digit streaming margins in FY26, though management says international monetization still has room to improve.
🍿 Entertainment gets its hit: Entertainment operating income surged +64% Y/Y, helped by streaming profitability and Toy Story 5, which crossed $1 billion at the global box office. The film also lifted merchandise sales and Disney+ engagement, showing how a successful franchise can reverberate across the company.
🏰 Experiences answer the skeptics: Experiences revenue rose +10% to a record $10.0 billion, while operating income jumped +20% to $3.0 billion. Domestic park attendance grew +3%, and per-guest spending rose +4%, with Walt Disney World having a particularly strong quarter. International visitation remains soft, but forward bookings are healthy.
🏈 Sports remains the weak spot: Sports revenue reached roughly $4.5 billion, while operating income fell -17% to $858 million, hurt by shorter NBA playoff series and rights timing. ESPN remains the clearest drag on Disney’s otherwise improving profit mix.
🤖 Disney+ gets a roadmap: CEO Josh D’Amaro said Disney will begin expanding Disney+ beyond video in spring 2027, adding games, merchandise, and other experiences designed to lower churn and increase lifetime fan value. Disney is also considering free ad-supported offerings as it turns Disney+ into the company’s broader digital hub.
Bottom Line: Streaming profitability is becoming repeatable, while Experiences just delivered the quarter investors feared it couldn’t. That gives D’Amaro more room to execute his “One Disney” strategy, with Disney+ increasingly positioned as the front door to content, commerce, and experiences.