Direct-to-Consumer revenues for the quarter increased 9% to $5.5 billion and operating loss
decreased to $0.5 billion from a loss of $1.1 billion. The decrease in operating loss was due to a lower loss
at
Disney+, higher operating income at Hulu and a lower loss at ESPN+.
The improvement at Disney+ was due to higher subscription revenue and a decrease in marketing
costs, partially offset by higher programming and production costs and lower advertising revenue. Higher
subscription revenue was attributable to Disney+ Core subscriber growth and increases in Disney+ Core
retail pricing. The increase in programming and production costs was due to higher costs for non-sports
content, partially offset by a decrease in sports programming costs. The decreases in sports programming
costs and advertising revenue reflected the comparison to IPL cricket programming in the prior-year
quarter, as we did not renew the digital rights beginning with the 2023 season. Higher costs for non-sports
content were due to more content provided on the service.
At Hulu, higher operating income included the benefit of subscription revenue growth and lower
marketing costs, partially offset by higher programming and production costs and lower advertising
revenue. Subscription revenue growth was due to increases in retail pricing and subscribers. The increase
in programming and production costs was attributable to more content provided on the service and an
increase in subscriber-based fees for programming the Live TV service, partially offset by a lower average
cost mix of SVOD content. Higher subscriber-based fees for programming the Live TV service were due
to more subscribers and rate increases. The decrease in advertising revenue was due to fewer impressions.
Improved results at ESPN+ were attributable to growth in subscription revenue due to increases in
retail pricing and subscribers.