Disney+ pays full price to the The Walt Disney Studios for the content. Studios then reports that gross price as part of their income. They then true up the margin in a separate column (eliminations) to calculate the final overall company operating/net income.
That way it shows the true performance of the Studios business, i.e. the studios doesn't loose money just because they are forced to sell to Disney+ vs Netflix. Which is why you get into the silly situation of Peacock (NBC) bidding against Netflix for the rights to NBC's The Office.
Similarly, the Parks/Consumer Products business pay the studios royalties for the use of their IP.
Thank you for answering the question. I would like to know how Disney decides on the money paid to the studios because that could have a major effect of bonuses and other compensation to people in different Divisions. Put another way, how does The Walt Disney Company allocate your monthly payments for Disney Plus because right now with 54.5 million subscribers they only need $0.50 a month from each customer to exceed the $300,000,000.00 Netflix was paying.Disney+ (Part of Disney Direct-to-Consumer & International) has to pay the other divisions of the company (parts of both studio entertainment and media networks) for content. Just as Netflix or any other service would have had to pay them for that content before.
Additionally the company is no longer being paid by outside services such as Netflix for content it now distributes in house.
Going forward and using only the number of Subscribers on March 28, 2020 and the RPU numbers Disney provided, Disney's streaming revenue from Disney+, ESPN+, Hulu and Hulu with live TV over a 12 month period would be $9.516 billion dollars a year. However, that excludes the 21 million customers added to Disney+ since then and customers added to ESPN+ and Hulu. It also excludes Hotstar revenue. I wish Disney would have included Hotstars numbers separately so we could know their total streaming revenue but the Direct to Consumer and International Division had $4.123 billion in revenue and lost $812 milion or $271 month. However, since March 28, 2020 Disney+ has added 21 million subscribers and with the launch in Japan in June Disney+ should end June with 63 million customers an increase of just under 30 million customers in 3 months. Disney+ will be profitable by the end of the year but Hulu and ESPN+ will still be negative. The question is what about Hotstar? Regardless, thanks to Disney+, The Walt Disney Company is making more from streaming than they did last year with Netflix.