Disney CEO Josh D'Amaro told investors the company is weighing a launch of free, ad-supported streaming channels, a move that would mark a sharp strategic pivot for a platform that has lost billions since its debut.
D'Amaro, Disney's newly installed chief executive, used a quarterly earnings call on Wednesday to outline a vision built on two pillars: streaming and theme parks. The centerpiece was his confirmation that Disney is actively considering so-called FAST channels, free, ad-supported television streams, as a way to reach viewers who balk at paying monthly subscription fees. He stopped short of announcing a launch date or naming distribution partners, but left little doubt about the direction.
The admission matters because Disney+ has been one of the most expensive experiments in entertainment history. The platform has burned through more than $24 billion in content spending, and the New York Post reported that Disney+ accumulated over $11.4 billion in operating losses between its 2019 launch and early 2024. A free tier would represent a frank acknowledgment that the subscription-only model cannot, by itself, justify that investment.
On the call, D'Amaro laid out a three-part case for FAST. First, free channels would extend Disney's reach to price-sensitive households that have so far stayed away from Disney+ and Hulu. Second, he argued Disney is better positioned than most competitors to absorb the additional ad inventory because the company's existing ad slots are already close to sold out. Third, he cast a free offering as a funnel, a way to hook casual viewers and convert them into paying Disney+ subscribers over time.
"We see it as a way to expand our reach to a customer segment that's more price sensitive, and expanding our reach is as we've talked about before one of our strategic priorities. Unlike a lot of our AVOD competitors, we're fairly well sold, meaning more inventory would actually help us accelerate our ad revenue growth. And then finally, as a free offering could help us drive top of funnel Disney+ subscriber growth. So nothing specific to announce today, but definitely something that we're considering."
That last line, "nothing specific to announce today", is doing a lot of work. It keeps Disney's options open while signaling to advertisers and Wall Street that the company sees free content as a growth lever, not a retreat.
Some investors and analysts have pushed Disney to abandon the direct-to-consumer model altogether and simply license its vast library to other platforms for guaranteed fees. D'Amaro rejected that idea in blunt terms. He called content licensing "a lumpy business" driven by supply-and-demand swings, and warned that walking away from Disney+ would leave the company in "both inferior strategic and financial positions."
His argument rested heavily on data. D'Amaro said Disney's streaming platforms give the company a global user base and a first-party data set, information collected directly from viewers, that enables personalization and product innovation. He pointed out that Disney also collects consumer data from its theme parks and cruise ships, creating a feedback loop between its physical and digital businesses that no licensing deal could replicate.
D'Amaro put it plainly:
"The shift to a purely licensing model could sacrifice all of that strategic value. Content licensing by nature is a lumpy business. It's subject to supply and demand dynamics in the marketplace at a given time. It's not to say that there isn't a role for content licensing. We do license some content to third parties today, but exiting direct-to-consumer for licensing exclusively would likely lead to both inferior strategic and financial positions for our company and our shareholders."
For shareholders who have watched Disney+ hemorrhage cash since 2019, the promise of first-party data and "longer term growth" is a familiar refrain. The question is whether D'Amaro can deliver profitability faster than his predecessors managed.
D'Amaro also addressed two seismic moves by competitors. Comcast recently decided to split NBCUniversal and Sky into a separate company from its cable systems. Fox Corp., meanwhile, struck a $22 billion deal to acquire Roku, the streaming hardware and platform giant. Both moves have reshaped the competitive landscape and raised questions about whether Disney should pursue its own deal-making.
D'Amaro declined to take the bait. He framed the consolidation as an opportunity rather than a threat, arguing that fewer competitors make for "a better investment backdrop." He noted Disney's long track record of distribution partnerships, though the company's recent history includes its share of friction. In one notable episode, Disney's channels went dark on YouTube TV for more than two weeks after the two sides failed to agree on licensing fees, disrupting coverage of college football, professional sports, and news programming before a new deal was reached.
D'Amaro said on the call:
"I don't think the Comcast restructuring or Fox's acquisition of Roku [are] moves that will change our own strategic path. The way that I see it is there's there's actually opportunity in these developments. A more consolidated industry is really a better investment backdrop, and we have a long history of partnering and streaming, and we believe that we can just keep building on that."
Beyond FAST channels, D'Amaro hinted at a broader overhaul of Disney+ set for next spring. He described plans to add games, merchandise shopping, and other interactive experiences within the app, along with increased personalization, exclusive content, and subscriber benefits. The goal, he said, is to make Disney+ "the digital centerpiece" of the company's relationship with fans worldwide.
He cast the streaming platform not as a content library but as a consumer hub, a single destination where Disney can sell tickets, toys, and experiences alongside movies and television. That vision depends on owning the customer relationship, which is the core reason D'Amaro gave for rejecting a licensing-only model.
D'Amaro described it in sweeping terms:
"We strongly believe that a large global user base is strategic to ensuring that we're able to drive longer term growth, especially as new technology cycles emerge, like AI and the consumer touch points that our streaming platforms provide. They give us a global user base to communicate with, and importantly, a critical first-party data set that will enable personalization and continued product innovation."
Disney has spent more than $24 billion on content for its streaming platforms. The New York Post previously reported that Disney+ racked up over $11.4 billion in operating losses from its 2019 launch through early 2024. D'Amaro is now asking investors to trust that the path to profitability runs through more spending, on free channels, on app features, on data infrastructure, rather than through cost-cutting or licensing revenue.
He may be right. A free tier could open Disney's content vault to millions of viewers who have never paid for Disney+ and never will. If even a fraction convert to subscribers, the math could work. And if the ad inventory sells at strong rates, D'Amaro's claim that Disney is "fairly well sold" suggests demand is there, the free channels could generate revenue on their own.
But the risks are real. Free channels could cannibalize paying subscribers who downgrade. The content pipeline has to stay full enough to feed both tiers. And Disney's track record on streaming profitability gives investors every reason to ask hard questions before writing another check.
D'Amaro said Disney is "playing a different game." After $24 billion and counting, shareholders are entitled to ask when that game starts producing a score.