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Disney prioritises streaming service as profits fall short

Walt Disney has failed to hit its own profit targets despite enjoying a successful summer box office as the media titan repositions itself to compete in the streaming era.

Disney posted net income of $2.9bn or $1.87 per share, equivalent to a 23% rise in profits year-on-year but below Wall Street estimates of $1.95 per share. These numbers were driven by both higher costs and declining income at its television networks which fell 1% to $1.8bn.

Despite the disappointment, unruffled chief executive Bob Iger expressed optimism for the future in conversation with analysts, pointing to the looming launch of an in-house Netflix rival late next year following its agreement to cannibalise large parts of 21st Century Fox.

Addressing the threat posed by streaming providers head-on, Iger shared his belief that Disney can "thrive alongside Netflix, Amazon and anyone else in the market" but conceded that a "lower volume of product" would be reflected in a keener pricing plan than its established rivals.

With Fox under its wing Disney will command a swathe of cable channels such as National Geographic with which to add to its existing assets such as Marvel and Pixar.