Disney Plans to Turn Disney+ Into a Broader Membership Ecosystem
Aug 06, 2026CEO Josh D’Amaro outlined the strategy alongside Disney’s fiscal Q3 results, with the first elements expected in spring 2027.
Disney used its fiscal third-quarter results Wednesday to outline a broader vision for Disney+.
CEO Josh D’Amaro said the company wants Disney+ to become Disney’s digital centerpiece and develop into a membership ecosystem connecting streaming with games, merchandise and other Disney experiences.
Disney expects to introduce the first elements in spring 2027. The expanded experience is expected to include more personalization, exclusive features and ongoing subscriber benefits.
Disney also said the product changes will help it segment the market and reach a broader range of customers over time. It has not explained what that segmentation will look like or whether it will include new membership tiers.
The company believes the strategy can give subscribers more reasons to engage with Disney, strengthen the value of Disney+ and support retention and customer lifetime value.
The strategy comes as Disney’s streaming business delivers stronger financial results.
Entertainment SVOD subscription fees increased 15% year over year to $4.72 billion during Disney’s fiscal third quarter, which ended June 27. The category primarily includes Disney+ and Hulu’s subscription streaming service. It excludes Hulu Live TV and Fubo.
Disney attributed most of the subscription-fee growth to more subscribers and higher effective rates, with a smaller contribution from favorable foreign exchange.
Total Entertainment SVOD revenue increased 11% to $5.53 billion. Disney reported non-GAAP Entertainment SVOD operating income of $712 million, up from $329 million, with a 13% operating margin. The company said the margin benefited partly from the timing of marketing and programming spending.
Disney also reported lower Disney+ churn across its domestic and international services but did not disclose a churn rate.
Disney+ Becomes the Digital Center
Disney’s long-term streaming strategy has two priorities: improve the core streaming experience and connect more of the company’s businesses through one digital ecosystem.
Its near-term work includes completing the integration of Hulu and Disney+, using sports to provide more value to U.S. subscribers and expanding international programming.
During the quarter, Hulu standalone and bundle subscribers gained the ability to link their profiles, watch histories and subscription management to Disney+. Disney also added autoplay video to the Disney+ home page and social clips to Verts, its vertical video feed.
Disney’s new agreement with TikTok will bring selected creator videos into Verts. The program will begin with a U.S. pilot in the coming months. Disney said it intends to expand the program to other markets after the pilot.
The agreement gives Disney a regular supply of short-form videos tied to its characters and franchises. It could encourage subscribers to open Disney+ between major film and series releases.
Disney has not said how much creator content will be available, how often the feed will be refreshed or when the program could expand beyond the initial pilot.
The company also plans to roughly triple the number of locally produced original series available on Disney+ over the next three years. Disney said the investment is intended to attract more international users and reduce churn.
Sports Supports Engagement and Upselling
Sports will play a larger role inside Disney+.
Beginning this fall, Disney plans to give subscribers a wider selection of live sports, anchored by additional college football simulcasts. Disney said the strategy is intended to increase engagement on Disney+ and encourage more subscribers to upgrade to its three-service bundle with ESPN Unlimited.
Sports subscription and affiliate fees increased 8% to $3.14 billion during the quarter. Disney said higher effective rates and the NFL transaction were the primary contributors to the increase.
Sports advertising revenue increased 5%, while total Sports segment revenue grew 4% to $4.5 billion.
Sports operating income declined 17% to $858 million. Higher programming and production costs more than offset the increase in subscription and affiliate fees. Disney attributed the higher costs primarily to contractual rate increases, new sports rights and the timing of expenses under its renewed NBA agreement. Sales and marketing costs also increased.
Insider Take
Disney is pursuing this strategy from a stronger streaming position. Its Entertainment SVOD operation is profitable on the company’s non-GAAP measure, subscription fees are growing and Disney+ churn declined during the quarter.
The larger idea is to give Disney+ subscribers value between major releases. Sports, creator videos, games and ongoing benefits could make the service part of a more frequent customer relationship.
That engagement could also help Disney understand customer interests and present more relevant offers.
The TikTok agreement fits directly into this strategy. It gives Disney a way to bring creator content into its subscription experience and keep Verts active with regularly refreshed videos. Whether that content increases viewing, discovery or retention remains to be seen.
Important questions are still unanswered. Disney has not said which benefits will arrive first, how it plans to segment subscribers, whether that will lead to new membership tiers, or how merchandise and other purchases will work inside Disney+.
Spring 2027 will be the first test of whether Disney can turn this vision into more frequent engagement and stronger subscriber retention.
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