ESPN's Direct-to-Consumer Strategy
Q: How will ESPN's DTC plans impact cord-cutting and your business?
A: We are launching a new sports service that will be substantially less expensive than the big cable bundle, aiming to attract sports fans who haven't subscribed to pay TV or have left it. We'll get paid in this joint venture at levels commensurate with the multichannel ecosystem, so if consumers shift from traditional pay TV to our DTC service, our revenues remain intact. While there may be minimal economic impact from cord-cutting, we're well-positioned to withstand challenges due to our content's presence on Hulu and Disney+. We see this as low risk and potentially accretive by signing up sports fans who've never subscribed to the bundle or may no longer want it.

Streaming Profitability Targets
Q: How will you achieve double-digit margins in streaming?
A: Our goal is to build a good business with attractive margins. We'll get there by growing subscribers, implementing some pricing, and gaining leverage from marketing, content, and technology spend. Key drivers include paid sharing initiatives, lower churn through bundling, and international growth opportunities. While we won't specify a time frame, we feel urgency to reach double-digit margins and will operate the business accordingly.

Hulu's Future and Buyout Timing
Q: How does Hulu Live fit long-term, and when will you resolve Hulu ownership?
A: Hulu Live offers a bundle of channels similar to other services, but the critical part is Hulu itself. The new sports service may compete with Hulu Live, but not with Hulu, which will benefit from bundling with our sports offerings. Regarding Hulu's ownership, the process will take time to value the business, but we expect to have it figured out and closed before the end of the year.

Capital Expenditure in Parks and Resorts
Q: Can you provide timing and location for the over $40 billion in new parks investments?
A: We're hard at work determining where to place our new investments, and they will benefit every location, including our cruise ships where we're building three more vessels. While we can't provide specific timing, we're already conceiving and building projects that will start opening in 2025, with a cadence of additional capacity every year.

Paid Sharing Crackdown Impact
Q: Have you sized the number of account borrowers for paid sharing?
A: We've sized it but won't disclose specific numbers. The opportunity is likely similar to what our competitor found. We're taking actions including changes to user agreements and communicating with accounts involved in unpaid sharing. Later this year, account holders can allow additional individuals access for an additional fee. This gives us confidence in our subscriber growth projections.