Disney aims to 'roar' louder with video streaming
WALT Disney's quarterly profit and revenue on Tuesday beat analysts' estimates, fuelled by movie studio hits.
The company also said it was taking a stake in a streaming video technology company to sell more content directly to consumers.
Disney and other media companies are struggling with consumers who abandon large bundles of channels sold by cable TV providers.
In buying a 33 per cent stake in video-streaming firm BAMTech for US$1 billion (S$1.3 billion), Disney is hoping to lure online viewers. It will begin with an ESPN subscription streaming service by year's end.
The service will not, however, include any of the content that appears on ESPN's TV networks, Disney said.
The investment will help "allay investors' fears about Disney's relevance in a world where content is delivered online", Pivotal Research Group analyst Brian Wieser said.
For the June quarter, Disney's movie and theme park divisions topped expectations, although a rise in cable networks revenue and operating profit was slightly below Wall Street targets, according to FactSet StreetAccount.
Revenue at Disney's cable networks business rose 1.4 per cent to US$4.2 billion in the third quarter ended July 2 but missed an analyst consensus of US$4.31 billion.
ESPN - the company's cash cow - drove the increase in cable networks operating income due to affiliate and advertising revenue growth, although the number of subscribers fell and programming costs rose.
The Jungle Book and Captain America: Civil War fuelled gains at the movie studio, with revenue increasing 39.6 per cent to US$2.85 billion.
Revenue at its theme park and resorts business was up 6 per cent to US$4.38 billion.