How Did Disney’s Media Network Segment Perform in Q2?

Media Networks segment’s second-quarter revenue

The Walt Disney Company (DIS) reported flat revenue of ~$5.5 billion in its Media Networks segment in the second quarter of fiscal 2019, which ended on March 30, 2019. The segment’s operating income fell 3% YoY (year-over-year) in the quarter.

A 2% YoY rise in Disney’s cable networks business offset by a 2% fall in its broadcasting business led to the flat revenue growth in its Media Networks segment. Within the segment, the cable networks business’s operating income rose 2% YoY, whereas the broadcasting business’s operating income fell 29% YoY compared to its rise of 40% YoY in the first quarter of fiscal 2019.

How Did Disney’s Media Network Segment Perform in Q2?

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Cable networks

The increase in the cable networks business’s operating income was driven by higher affiliate revenue at ESPN on the back of contractual rate increases partially offset by a fall in subscriber numbers. ESPN’s subscriber numbers have fallen due to cord cutting as streaming giants such as Netflix, Amazon Prime, Hulu, and Alphabet’s YouTube continue to attract subscribers to their streaming services by offering premium original content.

Higher programming costs and a decrease in advertising revenue offset the growth in the cable networks business. A rise in the contractual rate for key sports programming and a change in the mix of CFP (College Football Playoff) games added to these increased costs. Advertising revenue also fell due to lower rates and a shift in the mix of CFP games offset by higher impressions.


Operating income in the broadcasting business fell 29% YoY in the quarter due to a fall in advertising revenue, lower program sales, and higher programming costs offset by higher affiliate revenue growth from the contractual rate increase.

The fall in program sales was due to lower sales of Grey’s Anatomy and Criminal Minds offset by higher sales of How to Get Away with Murder. Advertising revenue also fell in the quarter due to lower network viewership partially offset by higher network rates.