Business

Disney's earnings and shares drop due to Fox's underperformance

The media giant wants to tackle competition in the streaming market, but has yet to face some hurdles after the acquisition of Fox business.

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  • Disney acquired Fox in March for $71 billion, bringing in some big hits such as Star Wars, Dr. Strange, and The Simpsons
  • Having completed its first quarter since acquiring Fox, the company experienced a 39% cut in its earnings during this last period.

As new players enter the streaming market, the previous king – Netflix – is struggling to stay competitive and not lose market space to an increasing number of companies joining the battle. One of the defiant competitors is Disney, a company that has been worrying its competitors since the announcement of its own streaming service Disney +.

With the acquisition of Fox’s entertainment business for $71 billion in March and the full takeover of Hulu later in May, Disney is boosting its presence in streaming services to compete face to face with Netflix. On Tuesday, the company announced a whole package of its three streaming services for $13, including Hulu, ESPN Plus and Disney +.

However, Disney ended the same day with some rather bleak news, since it missed Wall Street’s expectations after sharing its results on the first complete quarter in which it incorporated Fox. Disney’s shares dropped by 3%, with losses of 39% in earnings – and CEO Bob Iger said to Washington Post that the main issue affecting the company’s earnings are some of the underperforming shows in Fox.  

Even though, the high executive explained these issues with a touch of optimism, saying that “We’re all confident that we’re going to be able to turn around the fortunes of Fox live action and you’ll see those results in a couple of years.”

Disney +, as well as promotional package with all of Disney’s streaming services, will be launched later this year, in November.