14 November 2025
The Asia Business Daily
Disney Escapes Streaming Deficit... Turning Korea and Japan into "Profit-Generating Content Factories"
by Lee Jonggil
Walt Disney is restructuring its streaming business to focus on profitability. After six years of prioritizing subscriber growth since the launch of Disney+ in 2019, the company is shifting to a model that emphasizes operational efficiency and profit margins.
The key strategies are the global integration of Hulu, price increases, and strengthening its production bases in Asia.
Unified Global Distribution through Hulu Integration
On October 8, Disney officially launched the Hulu hub within the Disney+ app for international markets. Previously, in North America, an integrated app allowed users to watch Hulu content directly on Disney+.
The Star brand, which had served as the international market label, will be phased out.
The reason for eliminating the Star brand is clear. In North America, Disney+ and Hulu were operated separately, while in international markets, the same content was distributed under different brands, leading to inefficiencies.
By unifying under the Hulu label, Disney expects to reduce marketing costs and further enhance brand recognition.
An even more significant change is the overhaul of content distribution.
Now, original content produced in Korea and Japan will also carry the Hulu label and be simultaneously available on Disney+ apps worldwide. This means that regional productions are now consolidated within a single global distribution network. It is more than a simple UI integration; it is a restructuring of the supply chain itself.
The effects of this integration are already becoming evident. Korean dramas are automatically recommended on North American viewers' home screens, and Japanese animation is exposed to European audiences without separate marketing efforts. The algorithm operates based on genre and viewing patterns, creating a structure in which content spreads regardless of its production region.
Disney has also recently reduced or discontinued cable networks in several countries, reallocating resources from linear broadcasting to streaming. The company is rapidly moving toward a single, global platform system.
Profit-Oriented Transformation through Price Increases
Alongside platform integration, prices have also increased. On October 21, Disney raised its Disney+ subscription fees in the United States. The ad-supported plan rose from $9.99 to $11.99 per month, and the ad-free premium plan increased from $17.99 to $18.99. The Hulu ad-supported plan also went up from $9.99 to $11.99.
This is not simply a response to inflation. It represents a strategic shift to focus on average revenue per user and advertising rates rather than total subscriber numbers. Disney is now fully adopting the approach that Netflix began in 2022.
As expected, there was some short-term backlash. According to U.S. data analytics firm Antenna, the Disney+ churn rate rose to about 8% and Hulu to 10% during September and October. Although this is roughly double the average, Disney does not view it as a serious problem. Instead, the company is streamlining its subscriber base by shedding price-sensitive users and restructuring the system around higher-paying subscribers.
The numbers support Disney's assessment. According to Reuters, Disney's streaming business turned a quarterly profit for the first time this year, breaking out of a deficit structure for the first time in six years since launch. The company is betting that charging higher fees to 50 million subscribers is more profitable than acquiring 100 million subscribers at lower rates.
Disney's strategic pivot aligns with broader trends in the OTT industry. Since 2022, Netflix has improved profitability through price hikes and the introduction of ad-supported plans, while Warner Bros. Discovery has restructured its Max subscription. Securing profit margins, rather than engaging in low-price competition, has become essential for survival.
Positioning Asia as a Global Production Hub
In addition to improving its profit structure, Disney is also reorganizing its content supply chain.
At the "Disney+ Original Preview" held at Hong Kong Disneyland on November 13, the company unveiled about 20 new titles from Korea and Japan. This signals Disney's intention to develop Asia not just as a consumer market, but as a global content production base.
The rationale for focusing on Asian content is clear. Korea and Japan have robust production infrastructure and proven storytelling capabilities. Production costs are only 30-40% of those in Hollywood, yet the quality is world-class, making for highly efficient investments. Moreover, Korean dramas and Japanese animation have already built strong fan bases in North America and Europe. They are among the few non-English language contents that transcend language barriers.
Luke Kang, President of Disney Asia-Pacific, stated, "We will collaborate with local storytellers inspired by various creative sources such as webtoons, games, and music." Carol Choi, Head of Original Content for Asia-Pacific Region, added, "Originality is the key driver of Disney storytelling, and creators in the Asia-Pacific region are at the heart of that."
Korean titles include "City of Pieces," "Goldland," "Remarried Empress," "Hypnosis," "Made in Korea," Season 2 of "Killers' Shopping Mall," and "21st Century Grand Lady." From Japan, new releases include "Death Stranding: Isolation," overseen by Hideo Kojima, the Korea-Japan co-production "Merry Berry Love," "Tokyo Revengers: Three Deities Arc," "Cat's Eye: Part 2," and Season 2 of "Medalist."
This robust lineup is a result of Disney producing over 155 original series in the Asia-Pacific region since entering the market in 2021. Through trial and error, the company has learned what works and is now entering a phase of scaling up production.
Notably, although these works are locally produced, they are planned from the outset for global distribution. Production, distribution, and advertising sales are all handled within Disney's own platforms. The recent Hulu integration is part of this strategy. Content produced in Korea and Japan is labeled as Hulu and automatically exposed to viewers in North America and Europe. Global distribution is completed through Disney's internal network, without the need for separate licensing agreements.
Collaborative Strategy to Disperse Production Cost Risks
This approach in Asia closely mirrors Netflix's basic structure. Both companies do not operate their own production studios but instead collaborate with local production companies.
In April 2023, Netflix announced plans to invest $2.5 billion (about 3.3 trillion won) in Korean content over the next four years. The company has partnered with CJ ENM, Studio Dragon, and JTBC, producing at least 25 Korean original titles annually and expanding successful series into multi-season franchises.
Disney also collaborates with trusted partners such as Studio N and CJ ENM. However, the number of titles is about 20 per year across Korea and Japan, which is fewer than Netflix. Given its existing global IPs like Marvel and Pixar, Disney appears to be balancing between leveraging established IP and investing in Asian originals, rather than going all-in on the latter.
This aligns perfectly with Disney's current profit-first strategy. While operating its own studio allows for direct control over production costs, it also increases fixed costs. The collaborative model allows for project-based cost management, offering much greater flexibility. It enables Disney to secure proven content with lower investment.
Strategy Converging on System Efficiency
Ultimately, the changes Disney is pursuing point in a single direction. By integrating its platforms, Disney is streamlining its distribution structure; by raising prices, it is securing profitability; and through Asian collaborations, it is managing production costs. All three strategies converge on efficiency and profit margins.
As the OTT industry shifts from a subscriber war to a battle for profitability, Disney has chosen to focus on system efficiency. Instead of generating buzz with Marvel and Star Wars as it did in the early days, the company is refining its distribution network, restructuring its pricing model, and strengthening production partnerships. The era has arrived in which operational structure, rather than sheer content volume, determines competitiveness.
Whether this strategy will succeed remains to be seen. The Netflix model of dominating the market with overwhelming content volume is still effective. Disney, however, is taking a slightly different path by leveraging its strengths in IP management and global distribution. A new chapter in the reorganization of the streaming market has begun.
