Disney’s ad revenues rise as streaming overtakes linear TV in monetisation shift

Advertising is emerging as a key pillar of Disney’s growth strategy as the company accelerates its transition from linear television to streaming.

In its Q2 FY26 earnings, Disney reported that Entertainment subscription and affiliate revenues grew 14% year-on-year, while advertising revenues increased nearly 5%, driven by higher impressions across its platforms.

The company highlighted a structural shift in its business model: “We currently generate more Entertainment subscription and affiliate fees and advertising revenues from SVOD than linear TV, and we expect the mix shift from linear toward streaming to continue.”

This marks a turning point for Disney’s monetisation strategy, with streaming now overtaking traditional television as its primary revenue engine.

The growth has been supported by a combination of pricing adjustments, stronger engagement, and the expansion of ad-supported tiers within its streaming services. Disney said it is actively “managing through a monetization transition” for its television brands as consumer behaviour continues to shift toward digital platforms.

While advertising performance in the entertainment segment remained strong, trends in sports were more mixed. Disney reported that ESPN advertising revenues declined 2% year-on-year, driven by fewer impressions and the absence of certain high-profile events compared with the previous year.

Despite this, the company remains optimistic about the long-term role of advertising, particularly in live sports. Disney pointed to continued demand for premium inventory, noting that live programming remains one of the few formats capable of attracting large, engaged audiences at scale.

At the same time, growth in digital subscribers is helping offset structural declines in the linear business. The company noted that revenue generated from streaming is increasingly compensating for shrinking cable subscriptions, reinforcing the shift toward direct-to-consumer models.

The evolving revenue mix reflects a broader industry transition, as media companies move toward hybrid models that combine subscription and advertising income to improve yields and profitability.

For Disney, the shift underscores a larger strategic reset: as streaming becomes central to its ecosystem, advertising is set to play an increasingly important role in driving growth across both its entertainment and sports businesses. StoryBoard18