Disney is restructuring its business: in future, a large proportion of the revenue from the consumer products division is to be allocated to the entertainment segment. At the same time, the group is grappling with technical challenges relating to its Disney+ streaming service.
Disney intends to align the marketing of its content more closely with the studios that develop these brands in future. As CEO Josh D’Amaro announced in a letter to shareholders following the release of the results for the third fiscal quarter of 2026, from the start of the 2027 financial year, large parts of the consumer products business will no longer be allocated to the Parks & Experiences division, but to the Entertainment segment.
Among other things, the change affects revenue from the exploitation of brands such as Marvel, Pixar and Star Wars. According to Disney, the new classification is intended to better reflect the value that the content produced holds for the group’s long-term monetisation.
The importance of brand merchandising is evident from the latest figures: in the third quarter of the 2026 financial year, Disney’s consumer products division recorded its highest quarterly turnover in five years, at US$1.065 billion. Merchandising related to the animated film „Toy Story 5“ in particular contributed to this growth.
The streaming business also performed well. Disney+ and Hulu increased their revenue by 11 per cent to US$5.53 billion during the quarter. Operating profit for the streaming division more than doubled to US$712 million.
Patent dispute weighs on Disney+’s premium offering
Alongside its business restructuring, Disney is facing technical challenges in the streaming sector. A patent dispute with the rights management company InterDigital led to premium features on Disney+ in Germany being temporarily restricted.
Among other things, 4K streaming and certain HDR formats were affected. Whilst 4K playback is now available again for many users, some features remain unavailable in certain cases. Premium subscribers received information from Disney regarding a special right to cancel their subscription and possible pro-rata refunds.
This case highlights a key challenge facing the streaming industry: alongside content and subscriber numbers, technical standards, licensing rights and patents are also becoming increasingly important from a strategic perspective.
With the reorganisation of its consumer products business and investments in its streaming platform, Disney is continuing to work on monetising its key brands more effectively across various distribution channels.