Disney Reaffirms Outlook for Streaming Profits Through 2024; CEO Bob Iger called the business “my No. 1 priority” but vowed not to “abandon” movie theaters or linear TV.

Disney CEO Bob Iger on Wednesday reaffirmed the company’s long-held guidance to investors that its streaming business would be profitable by the end of 2024.

Speaking on the company’s quarterly earnings call, Iger called streaming “my No. 1 priority” and said he had “drilled into every aspect of our streaming business” since returning as CEO last November.

Multiple times on the call, analysts pressed Iger on how he will manage the balance between shrinking linear TV networks and streaming offerings whose economic models are still coming into focus. Last September, when he was still an independent media personality and not yet back in the corner office in Burbank, Iger drew attention with a sharp vision for TV outlined at the Code Conference. “Linear TV and satellite are moving in a great flux and it’s going to stop,” he said, “I can’t tell you when, but it’s going to go.”

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The executive echoed that theme today, telling analysts he’s been “watching it very carefully for a long time. What I’m talking about is the impact of technology basically shifting a huge amount of authority from producers and distributors to the consumer.” Streaming, unlike pay bundles that have existed for decades, allows subscribers to sign up and pay a nominal amount for a single title and then cancel their subscription. “It’s a tremendous change,” Iger said.

As the company faced a tough economic climate last year and took stock of its heavy spending on content as well as the loss of cricket rights in India, it lowered its target for subscribers to the flagship Disney+. The updated number is between 215 million and 245 million, down from 230 million to 260 million. It reiterated its plan to turn a profit by the end of the fiscal year, but many Wall Streeters have begun to publicly question whether the company can hit that mark. In the quarter ended last October, operating losses at the streaming unit hit $1.5 billion, surprising many analysts.

As he restates the profit plan, Iger said, Disney, “like many of our peers,” will stop predicting customers if it puts too much emphasis on profitability and other metrics. (Netflix made a similar move starting with its earnings report last month.)

Losses at streaming narrowed to $1.1 billion in the quarter ended Dec. 31, helping the company’s overall financial performance beat Wall Street analysts’ forecasts. Disney+’s total subscribers, however, declined for the first time since the service launched in 2019. Due to the loss of Cricket in India, formerly a linchpin of the Disney+Hotstar offering, subscriber levels fell by 2.4 million from the previous quarter, settling at 161.8 million. Excluding Hotstar bundled subscribers, core Disney+ grew 1% sequentially to 104.3 million.

As it pursues its streaming goals, Iger said, “We will focus more on our core brands and franchises, which have consistently delivered superior returns.” Other priorities will address pricing, local content and promotions.” The company was “probably too aggressive” in marketing its streaming services, the CEO said, though customer acquisition will remain a priority in the future, until they “Quality subs,” which he defines as more loyal individuals who may be more sympathetic to price increases. Disney’s initial decision to floor accelerator customer acquisition costs was made amid an “arms race” involving media companies as well as tech giants such as Amazon and Apple, and such Taken at a time when customers — not profits — mattered most to Wall Street

Disney has been “eye-opening” as linear TV subscriber levels have declined, Iger asserted. “We’re in a very interesting transition period, one that inevitably leads to streaming.” The company will “rebalance” its efforts, it said, as traditional outlets such as linear TV and movie theaters “can still provide us with a significant amount of monetization power,” as well as marketing clout and content spending metrics. Abbott ElementaryFor example, broadcasts on ABC attract an average audience of about 60 years old, compared to Hulu viewers, who are in their 30s.

Hulu and ESPN+, two of the three pillars of Disney’s streaming bundle, are two key variables in the company’s overall financial outlook in the direct-to-consumer realm. As for ESPN’s streaming future, which has a strong but shrinking linear TV presence, Iger said the company has seen “fantastic growth” in ESPN+ to nearly 25 million subscribers nearly four years after launching. “We’re going to continue to look at this as a potential pivot for ESPN away from the linear business, but we’re not going to do it quickly, we’re not going to do it until it makes economic sense,” he said.

Hulu, meanwhile, faces a crossroads a year from now, when a deadline for the service’s future looms. Set up as a joint venture and operated solely by Disney since 2019, Hulu is still one-third owned by Comcast, whose NBCUniversal was a primary partner in it.

CFO Christine McCarthy echoed Iger’s profit outlook, but noted that the target is based on a number of assumptions, including the broader global economic condition. He also noted that the addition of Disney+’s ad-supported tier last December won’t have a real impact on results until the end of the current fiscal year.

Peter White contributed to this report.