What is The Walt Disney Company (DIS 0.09%)?

Is it a theme park operator? A cinematic powerhouse? A direct-to-consumer streaming company (i.e. Disney+?) The truth is that Walt Disney is all of these things. Yesterday, my fellow Fool (and Florida resident) Rick Munarriz took investors through a tour of the health of Disney's theme park business -- which was "fantastic," by the way, with revenue more than doubling, and earnings flipping from a loss to a profit.

Today I'm going to tell you what's going on at Disney+ -- which, to be honest, is I think the more interesting story.

Girl watching streaming TV on a tablet while lying on a couch.

Image source: Getty Images.

Disney by the numbers

Reporting earnings for its fiscal Q2 2022 on Wednesday, Disney reported strong 23% revenue growth but a near 50% decline in earnings per share. Both numbers would have looked better but for the fact that Disney decided to terminate certain film and television content licenses ahead of schedule, sacrificing $1 billion worth of potential high-margin revenue to shift that programming over and show it on Disney+ and Hulu instead.

And yet this was not necessarily an illogical choice to make.

Disney's streaming businesses are going great, after all, growing their revenues 23% year-over-year. (Although operating losses increased twice as fast -- up 50% to $0.9 billion.) Disney+ in particular attracted 7.9 million new subscribers in Q2, bringing total subscribership to 137.7 million households -- 33% more than one year ago. ESPN+ subscribers were up 62% at 22.3 million, and even Hulu showed a bit of growth, up 10% to 45.7 million.

Of these three major streaming "channels," Disney+ is the weakest revenue producer currently on a per-subscriber basis, mainly because of the company's Disney+ Hotstar business in India, which brings in only $0.76 per user per month, pulling the average down. If Hotstar is excluded, Disney+ actually brings in $6.33 per subscriber per month.

Even so, it would appear that given the relatively low price Disney is charging for Disney+, and the service's great popularity -- Disney+ has about three times more subscribers than Hulu, and nearly seven times more than ESPN+ -- there's probably room for Disney to raise prices on the channel. After all, not counting Hotstar, Disney+ is only bringing in half the revenue per user of Hulu. Raise prices enough, and Disney+ could quite possibly swing from losing money for Disney to making money for Disney, more or less instantaneously.

It might help soften the blow of such a rate hike, however, if Disney+ had lots of additional content to offer. While it cost Disney some sales growth, and cost it quite a lot of profit, giving up licensing revenue in order to quickly shift content to Disney+ (and/or Hulu) makes sense if it ultimately helps to grow the business.