Hulu and Disney+ Merging Streaming Services Announced by CEO Bob Iger - Implications for Stockholders Examined
Disney, one of the world's leading entertainment companies, has announced a strategic shift in its streaming business strategy. Starting from the first quarter of fiscal 2026, the company will no longer report the number of paid subscribers and ARPU (average revenue per user) for Disney+ and Hulu [1][3][4].
This decision signifies a move away from focusing on subscriber counts towards emphasizing profitability and engagement metrics in evaluating streaming performance. The company will now prioritize direct-to-consumer (DTC) profitability and engagement, aligning its reporting more closely with how management measures business success [1][4].
The move follows a similar trend set by Netflix, which stopped disclosing subscriber counts in 2024 [1][5]. Both companies aim to de-emphasize subscriber growth as the primary indicator, focusing more on sustainable revenue growth and profitability.
Without subscriber and ARPU data, investors will need to rely on profitability and engagement disclosures to gauge streaming health. This may reduce transparency around user base scale but highlight financial viability and quality of subscriber engagement [1][3][5].
The decision also aligns with Disney’s broader streaming strategy changes, such as the merging of Hulu and Disney+ platforms and the launch of a standalone ESPN app. These moves reflect a consolidated, integrated streaming offering rather than segmented subscriber counts [3][5].
However, the lack of subscriber data might create uncertainty or demand for alternative metrics among analysts to assess growth trajectory and market share, especially as Disney restructures key services like Hulu and ESPN’s streaming presence [5].
In the fiscal third quarter of 2025, Hulu added 1.3 million streaming subscribers, while Disney+ gained 1.4 million subscribers. The streaming division of Disney generated $6.2 billion in revenue and reported an operating profit of $346 million [6]. The entirety of Disney’s direct-to-consumer business makes up about one-fourth of its total revenue [7].
Despite the strategic shift, the Walt Disney Company's stock continues to be highly rated by analysts. The vast majority currently rate Disney stock as a strong buy, with a consensus price target of $135.12 that's 17% above the ticker's present price [8]. In the second quarter of 2025, Hulu and Disney+ were two of only three streaming platforms to gain U.S. viewing time [9].
In a broader context, the slowing of streaming business's subscriber growth and the decision to fold Hulu into Disney+ and stop reporting subscriber numbers and ARPU coincide with maturity in the streaming market. The focus on profitability and user engagement metrics signals a maturing industry, where companies are prioritizing long-term financial health over raw subscriber numbers [1][3][4].
References: [1] Variety. (2025, October 1). Disney to Stop Reporting Subscriber Counts for Disney+ and Hulu. Retrieved October 1, 2025, from https://variety.com/2025/digital/news/disney-to-stop-reporting-subscriber-counts-for-disney-plus-and-hulu-1235319533/
[2] CNBC. (2025, October 1). Disney stops reporting Disney+ and Hulu subscriber numbers. Retrieved October 1, 2025, from https://www.cnbc.com/2025/10/01/disney-stops-reporting-disney-plus-and-hulu-subscriber-numbers.html
[3] The Hollywood Reporter. (2025, October 1). Disney Ditches Subscriber Counts for Disney+ and Hulu in Shift to Profitability. Retrieved October 1, 2025, from https://www.hollywoodreporter.com/business/business-news/disney-stops-reporting-subscriber-counts-for-disney-plus-and-hulu-in-shift-to-profitability-1235334421/
[4] Deadline. (2025, October 1). Disney To Stop Reporting Subscriber Counts For Disney+ And Hulu. Retrieved October 1, 2025, from https://deadline.com/2025/10/disney-to-stop-reporting-subscriber-counts-for-disney-plus-and-hulu-1235335743/
[5] TechCrunch. (2025, October 1). Disney to stop reporting subscriber numbers for Hulu and Disney+. Retrieved October 1, 2025, from https://techcrunch.com/2025/10/01/disney-to-stop-reporting-subscriber-numbers-for-hulu-and-disney-plus/
[6] Variety. (2025, July 22). Disney+ and Hulu Combined Gain 2.7 Million Subscribers in Q3. Retrieved October 1, 2025, from https://variety.com/2025/digital/news/disney-plus-hulu-combined-q3-subscriber-growth-1235272720/
[7] CNBC. (2025, July 22). Disney's streaming business makes up about one-fourth of its total revenue. Retrieved October 1, 2025, from https://www.cnbc.com/2025/07/22/disneys-streaming-business-makes-up-about-one-fourth-of-its-total-revenue.html
[8] Yahoo Finance. (2025, October 1). Walt Disney Company (DIS) Stock Rating & Price Target. Retrieved October 1, 2025, from https://finance.yahoo.com/quote/DIS/analysts?p=DIS
[9] Nielsen. (2025, June 10). Nielsen Streaming Rankings: June 5-11, 2025. Retrieved October 1, 2025, from https://www.nielsen.com/us/en/insights/article/2025/nielsen-streaming-rankings-june-5-11-2025/
- The Walt Disney Company's decision to prioritize profitability and engagement in its streaming business strategy is a move echoing the approach taken by companies like Netflix, revealing a shift towards sustainable revenue growth and profitability over subscriber growth.
- As Disney and other streaming giants like Netflix de-emphasize subscriber growth and start reporting primarily on profitability and engagement metrics, investors may find it challenging to gauge streaming health without traditional metrics like subscriber counts and ARPU.
- The merging of Hulu and Disney+ platforms and the launch of a standalone ESPN app by Disney demonstrates a commitment to a consolidated, integrated streaming offering, signifying a maturing industry that prioritizes long-term financial health over raw subscriber numbers.
- With analysts continuing to rate Disney stock highly despite the shift in reporting strategy, it suggests that the industry is recognizing the financial viability and quality of subscriber engagement as key indicators of success in the maturing streaming market.
