Walt Disney NYSE: DIS Chief Financial Officer Hugh Johnston outlined the company’s priorities around intellectual property investment, technology, streaming engagement and experiences growth during a Goldman Sachs conference appearance.
Johnston said Disney has “very good momentum” and is operating around three priorities articulated by CEO Josh: continuing to invest in intellectual property, embracing technology to support product creation and monetization, and building a more unified relationship with consumers through a “one Disney” model.
“We’re trying to sort of create that single relationship with consumers,” Johnston said, adding that the effort is intended to reduce friction for customers and improve monetization over time.
Disney+ ecosystem and streaming strategy
Johnston described Disney+ as both a streaming service and a potential integrated ecosystem for fans. The company plans to provide more details in spring 2027, but he said the platform could increasingly incorporate consumer products, parks and cruises, talent and IP interactions, and potentially gaming.
The objective is to increase frequency of use, which Johnston said supports retention and lowers subscriber churn. He said Disney has already made progress integrating Hulu and Disney+ profiles into a “one fan, one account” ecosystem.
Additional product developments could include live television within the Disney+ app, deeper integration of Hulu add-ons and bundles, enhanced recommendation technology and a cleaner user interface. Johnston said investors should monitor fundamental streaming measures including churn, retention and, ultimately, revenue growth.
Disney is also pursuing a partnership with TikTok that Johnston said could attract younger, more interactive consumers to Disney+. He said the relationship could offer a top-of-funnel opportunity, support a creator ambassador program and help Disney expand its presence in vertical mobile video.
Margins, advertising and content investment
Johnston said Disney+ moved from losing “a couple of billion” dollars annually a few years ago to reaching a 13% margin in the most recent quarter. He said the company expects to finish the year with double-digit margins.
Rather than prioritizing additional margin expansion above all else, Disney intends to focus on revenue growth and growth in absolute operating-income dollars. Johnston said the company plans to invest more in content, particularly in international television programming, while maintaining double-digit streaming margins.
International content is intended to help sustain engagement between major franchise releases, he said. Johnston noted that international penetration remains below that of the market leader and said Disney has seen encouraging early results from shows in the United Kingdom and Korea. The company plans to use a mix of licensing and internally produced content, targeted by market and content type.
Disney also plans to introduce a free ad-supported streaming offering, or FAST channels. Johnston said the service could bring more price-sensitive consumers into Disney’s ecosystem, expand available advertising inventory and offer an alternative for subscribers considering cancellation. He said Disney could adjust the programming if it sees cannibalization of its paid service.
On advertising, Johnston said U.S. subscription-video-on-demand pricing has faced pressure from an increase in supply and that some softness is expected to continue in the fourth quarter. However, he characterized the overall advertising environment as healthy, citing strong demand for live sports. Technology, artificial intelligence, political and healthcare advertisers have been relatively strong, while consumer packaged goods, restaurants and telecommunications have been softer, he said.
Film slate, parks and cruises
Johnston said Disney is encouraged by its film slate and cited strong demand for “Avengers: Doomsday,” which he said had generated $50 million in presales three months ahead of its December release. He also pointed to upcoming titles including “Bluey,” “Incredibles 3,” “Frozen 3” and another Avengers film in 2028.
He said successful films support Disney’s broader flywheel across consumer products, streaming, parks and cruises. Johnston cited “Toy Story 5” as an example, saying the film supported consumer-products growth, streaming performance and experiences featuring the franchise.
In domestic parks, Johnston said attendance rose 3% year over year in the third quarter. International visitation to U.S. parks remained somewhat lower, though it improved from the second quarter, while Disney’s marketing and promotions targeted domestic guests.
The company continues to invest in park capacity and new attractions, including Tropical Americas at Animal Kingdom, Monstropolis at Hollywood Studios, an Avengers Campus expansion and new cruise ships. Johnston said these investments are designed to support both attendance and per-capita spending by adding capacity and creating additional guest value.
He said per-capita growth has been driven more by guest mix and optional premium offerings, such as Lightning Lane, VIP tours and higher-end restaurants, than by ticket-price increases. Disney is also focused on keeping pricing accessible for young families during lower-demand periods, he said.
EPS outlook and capital allocation
Johnston reiterated Disney’s outlook for 12% underlying earnings-per-share growth this year and another year of double-digit underlying growth in fiscal 2027. He identified experiences and entertainment, including streaming, as the principal growth drivers, saying they represent roughly 85% of company earnings.
For ESPN, Johnston said the direct-to-consumer product is performing in line with expectations and that the company is largely secured on its core sports-rights portfolio through 2029 or 2030. He said Disney has remained disciplined in rights negotiations, deciding that Formula 1 and wrestling had become too expensive.
Looking ahead, Johnston said Disney aims to pair tighter cost management with reinvestment in growth opportunities. “My priorities are basically to enable that virtuous circle of reducing costs, reinvestment in the business, driving growth, creating operating leverage, and then reducing cost again,” he said.
About Walt Disney (NYSE:DIS)
The Walt Disney Company NYSE: DIS is a global entertainment and media company that develops, produces and distributes content across film, television and streaming platforms. Its portfolio includes Disney, Pixar, Marvel, Star Wars, National Geographic and other brands, with content distributed through theatrical releases, television networks and direct-to-consumer services such as Disney+, Hulu and ESPN's streaming offerings.
Disney also operates sports media businesses, including ESPN, and owns and manages theme parks, resorts, cruise lines and other location-based entertainment experiences.
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