There was a lot to like when Walt Disney (NYSE:DIS) reported its third-quarter financial results on Aug. 7. The company achieved solid year-over-year growth, though results missed analysts' consensus estimates. Revenue increased 7% year over year, to $15.23 billion, driven by improved results in the company's media networks, parks and resorts, and studio entertainment segments. 

On the quarterly conference call to discuss the results with analysts, Disney management provided a few tidbits about its declining subscriber growth at ESPN. However, in light of Comcast's recent decision to bow out of the bidding war for the assets of Twenty-First Century Fox (NASDAQ:FOX) (NASDAQ:FOXA), Disney executives spent much of the call detailing its massive acquisition, and how it will fit into the company's streaming plans. 

Image from the Fox movie Logan, with X-Men character Wolverine with his claws extended and a sunset behind him.

Disney will gain the X-Men characters when it acquires Fox. Image source: 20th Century Fox.

Subscriber declines slowing

One of the key concerns for Disney investors is the falling subscriber rate for the company's flagship ESPN sports network. With the adoption of streaming services gaining steam, consumers have been opting out of higher-priced cable packages in ever-increasing numbers. Since the media networks business provides the lion's share of Disney's profits, falling numbers at ESPN have been a growing concern.

A bit of encouraging news: CFO Christine McCarthy pointed out "this is the fourth consecutive quarter we've seen improvement in the rate of net subscriber declines. While net subscriber counts are still lower than prior year, we're encouraged by the trends we're seeing." CEO Bob Iger also addressed the issue, attributing the slower declines to the availability of smaller, lower-cost cable packages, which have "steadily slowed overall [subscription] losses."

The coming acquisition

Iger focused most of his prepared remarks on laying out his view of "the tremendous potential" arising from the Fox acquisition. In the wake of the overwhelming approval achieved in the recent shareholder vote, Iger said, "[W]e're even more enthusiastic and excited by all the opportunities ahead."

Iger spoke about the well-known Fox brands -- Searchlight, FX, and National Geographic -- and said Disney plans to "further invest" in them, using Fox "as a critical supplier of original content for our direct-to-consumer (DTC) platforms." He cited National Geographic as a "tremendous brand built on quality" and having "global reach and cross-generational appeal." He also highlighted Searchlight Pictures as a "creative engine we respect and admire a great deal," using the 20 Oscar nominations the studio achieved last year as proof of its excellence. Disney's strategy will be to "give the studio what it needs to continue to do what it does best."

He also highlighted 20th Century Fox Film, with "iconic movie franchises like Avatar, Marvel's X-Men, The Fantastic Four, Deadpool, Planet of the Apes, Kingsman, and many others." Iger said Disney is looking to "the Fox assets to enhance and accelerate our DTC strategy." Many have long suspected this might be the direction the company would take, but this is the first time that Iger has confirmed it.

Luminescent flowers from the Pandora -- The World of Avatar attraction at Disney World.

Image source: Disney.

Not Netflix

In response to an analyst question, Iger was clear that Disney's streaming offering wasn't going to try to compete with Netflix on quantity. He said, "It does not have to have anything close to the volume of what Netflix has because of the value of the brands and the specific value of the programs," citing the consumer appeal of Pixar, Marvel, Disney, Lucasfilm -- and ultimately National Geographic -- which he sees as a good fit with Disney's family-focused brands.

Iger said that while Netflix has many quality offerings, "they're also in the high-volume game. And we don't really need to do that." He said, "We've always believed we have the brands and content to be extremely competitive and to thrive alongside Netflix, Amazon, and anyone else in the market." Iger also revealed that Disney is contemplating a lower price point than Netflix, saying, "The price, by the way, will also reflect a lower volume of product." He went on to say that Disney's cost to produce and own the content would be far lower than Netflix's.

Win, place, or show

Many investors are convinced that there will ultimately be only one winner in the streaming market, but Iger doesn't believe that to be the case. "It's also interesting to note that today more than half of U.S. homes subscribe to streaming services," he said. "And on average, they subscribe to three different [subscription video on demand] products."

Iger doesn't think that Disney needs to win the streaming wars: It just needs to be among the top three that consumers ultimately choose -- and he thinks Disney will be. I, for one, agree.