Disney (DIS) , which owns TV channels such as ESPN, National Geographic, and Freeform, is feeling the brunt of the growing cord-cutting trend, like many of its telecom industry competitors.
This trend involves consumers ditching cable TV en masse for streaming services, a cheaper option than cable.
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A recent survey from digital security firm All About Cookies found that less than half (46%) of Americans watch TV through traditional cable or satellite TV, while 76% said they watch shows through paid streaming services.
Related: Comcast takes drastic action as customers rapidly cut service
Amid this trend, Disney revealed in its fiscal third-quarter 2025 earnings report that its U.S. operating income in its linear networks segment (its TV business) decreased by 14% year-over-year due to a decline in advertising revenue, which was fueled by “a decrease in average viewership and lower rates.”
The decline in viewership comes after two of the largest cable TV providers in the U.S., Comcast and Spectrum, have lost about 608,000 TV customers during the first quarter of 2025, meaning they faced an average of 6,755 cancellations daily.
Disney makes unexpected move to repair recent losses
To help combat losses from this rapid shift in consumer behavior, Disney is drastically changing two of its most popular streaming platforms.
The media giant recently announced that it plans to combine Hulu and Disney+ to attract more customers. The Hulu app will soon disappear as it becomes fully integrated into the Disney+ platform.
This comes after Disney+ and Hulu reached 183 million subscriptions during Disney’s fiscal third quarter this year, an increase of 2.6 million, compared to the previous quarter.
During an earnings call on Aug. 6, Disney CEO Bob Iger said that the company will add new features, such as a “more personalized homepage,” to the Disney+ app over the next few months. The unified Disney+ and Hulu streaming app will be available to consumers in 2026.
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“By creating a differentiated streaming offering, we will be providing subscribers tremendous choice, convenience, quality, and enhanced personalization, while at the same time continuing to grow profitability and margins in our entertainment streaming business through expected higher engagement, lower churn, operational efficiencies, and greater advertising revenue potential,” said Iger.
In addition to combining Disney+ and Hulu, Disney is also enhancing the sports side of its streaming strategy. On Aug. 21, it will launch its new ESPN app for $30 a month, right before football season.
“The enhanced ESPN app will be a sports fan’s dream with key new features planned for launch, such as multi-view, enhanced personalization, integration of stats, betting, fantasy sports and commerce, and a personalized sports center,” said Iger.
During the call, Iger also clarified that Disney is in “the television business” as it doesn’t view itself as operating in the streaming or cable TV business.
“As a company now, (we’re) operating these businesses completely as one,” said Iger. “And that gives us an opportunity to not only run them more efficiently, but to aggregate fees and advertising revenue across a very, very broad range of television distribution platforms.”
Disney’s streaming platforms face growing competition
Disney’s latest streaming announcements come as many cable giants have been launching their own streaming services to attract back fleeing customers.
For example, last year, Spectrum launched two streaming packages, Spectrum TV Stream and Spectrum Stream Latino, for $39.99 a month and $29.99 a month, respectively.
In November last year, DirecTV began offering customers access to over 90 channels such as CourtTV, ABC News Live, and Bravo Vault, for free through its MyFree DirecTV app.
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Also, in January, it unveiled its MySports streaming package, which offers access to over 40 sports and broadcast channels for $70 a month. Weeks later, it launched three new streaming bundles called Genre Packs, offering customers genre-specific channels for under $50 a month.
Many streaming companies are battling heightened competition from free streaming platforms such as PlutoTV and Tubi, which are increasingly resonating with consumers as paid streaming prices spike.
A recent survey from digital security firm All About Cookies found that 42% of Americans now watch TV through free streaming services.
Paramount, which owns PlutoTV, revealed during an earnings call in May that PlutoTV “delivered its highest consumption ever” during the first quarter of this year.
That same month, Fox also revealed during an earnings call that its free ad-supported streaming platform Tubi faced “accelerating growth” during the same quarter.
Related: Spectrum suffers major loss as customers pull the plug on service