Disney also announced that its new ESPN Plus streaming service that's set to launch in the next few months will cost $4.99 a month and will be integrated into completely overhauled ESPN app that Disney plans to launch across the major mobile and TV platforms.
In December, Disney agreed to buy assets of Rupert Murdoch's Twenty-First Century Fox for about $52.4 billion. Disney attributed the drop to lower advertising revenue, higher production cost write-downs and a decline in program sales income.
Walt Disney Co (NYSE:DIS) shares flew nearly 3% in after-hours trading last night after the House of Mouse delivered an earnings beat- even if the company did not quite meet revenue expectations for its first fiscal quarter of 2018.
Speaking on Disney's Q1 2018 Earnings Call, Iger said the ESPN DTC business would feature a completely re-conceived and redesigned ESPN app which would deliver important new services and experiences to users. And it's going to make use of BAMTech, the streaming technology company that Disney paid $1.58 billion for a majority stake in.
Net income soared 78% to $4.4 billion - largely as a result of the one-time benefit from the new federal tax laws. That may not bode well either for the Han Solo spinoff due this May or for the two new trilogies in the works - the latest, announced on Tuesday, to be written by the creators of "Game of Thrones".
To counter the shift to online viewing, Disney will launch a streaming service for sports fans in the spring called ESPN Plus to reach digital audiences, followed by a family entertainment offering in 2019.
Investors have been rattled by the loss of pay TV subscribers to ESPN, Disney's largest network. "The demand for those brands, we believe, will give us the ability to spend less on volumes", said Iger, on a conference call on February 6.
Cable network operating income was down 1% to $858 million as revenue rose 1% to $4.49 billion.
Studio entertainment Q4 revenues slipped 1% to $2.504 billion. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day.
Disney and 21st Century Fox made waves a year ago with their landmark deal, and now Disney's CEO has given fans an update.