As Josh D’Amaro prepares to succeed Bob Iger as Disney’s CEO next month, the company’s recent quarterly earnings shed light on the landscape he is inheriting. Disney’s numbers painted a picture of strength amid ongoing market challenges, but the market reaction underscores unresolved investor concerns. Streaming services such as Hulu, ESPN, and Disney+ demonstrated profit growth exceeding 70% year-over-year, while the theme parks and cruises segment—which falls under D’Amaro’s leadership—reported an unprecedented $10 billion in quarterly revenue. Such figures typically signal robust health in the media sector. Yet, despite these achievements, Disney’s share price dropped by 7% following the earnings announcement, reflecting a cautious investor sentiment since 2022.
Disney’s stock has lingered in neutral territory as the market anticipates a transformative phase post-Bob Iger’s tenure. The expectations rest on D’Amaro to continue and expand upon Iger’s initiatives, but he faces numerous operational and strategic obstacles in the near term. Here are five key challenges that D’Amaro must address promptly after assuming command.
1. The Decline of Traditional Television
The traditional mode of television consumption—the scheduled, linear broadcast format familiar to earlier generations—is experiencing a marked decline. This medium remains a complex puzzle not only for Disney, which operates multiple linear TV assets such as ABC, ESPN, FX, and the Disney Channel, but also for all significant media enterprises. Simply abandoning linear television in favor of streaming is an unviable shortcut, because lucrative advertising contracts and network partnerships still require navigation and maintenance.
The golden era of high-margin linear television programming driven by a hit show is largely over. The crucial uncertainty is whether streaming, with its more fragmented audiences and fiercer competition, can compensate for the waning profitability of linear TV. Previously, Iger considered divesting Disney’s linear networks but ultimately decided to retain them. Conversely, competitors Comcast and Warner Bros. Discovery opted to spin off such assets, delineating different strategic approaches. As CEO, D’Amaro will be tasked with determining whether to embrace the streaming-centric future exclusively or maintain a diversified portfolio including linear TV.
2. Fierce Streaming Market Competition
While Netflix remained the dominant profitable streamer for years, the last twelve months have seen other players, including Disney, establish viable profit models. Disney’s combined streaming platforms—Disney+, Hulu, and ESPN—achieved a profit of $450 million in the most recent quarter, supported in part by strategic subscription price hikes.
However, this pricing approach carries risks. Economic downturns, particularly among lower-income subscriber demographics, could prompt widespread subscription cancellations. Disney experienced a notable consumer backlash last fall after ABC fired Jimmy Kimmel, widely interpreted as a response to political pressure. Many viewers canceled Hulu and Disney+ subscriptions in protest. Though Kimmel was reinstated shortly after, the event highlighted subscribers’ willingness to disengage over content and corporate decisions. Disney has ceased publicizing subscriber data, making it unclear whether lost customers returned.
3. Box Office Performance Challenges
In 2025, Disney continued to exert dominance at the domestic box office with hits such as "Zootopia 2" and "Lilo & Stitch." Nevertheless, the company also suffered from several underperforming films. Releases including the live-action "Snow White," Pixar’s "Elio," and "Tron: Ares" failed to attract audiences in significant numbers. Despite continued high production costs, returns from theatrical releases have not rebounded to their pre-pandemic levels. Many consumers prefer the convenience of home viewing over the expense of going to theaters.
Compounding competitive pressures, the impending merger of Disney’s major rivals Warner Bros. Discovery and Netflix is poised to create a powerful new industry player. This development may further threaten Disney’s box-office share and require strategic responses to maintain its market position.
4. Competing in the AI-Driven Attention Economy
Disney’s battle for audience attention has expanded beyond traditional media rivals to encompass technology platforms like YouTube and TikTok. These platforms capture extensive viewer time with content often sourced from user-generated material without corresponding expenses for the platform holders.
In response, Disney has sought a foothold in this new digital landscape through a three-year licensing agreement with OpenAI. This deal allows users of Disney’s Sora app to embed Disney’s iconic characters into AI-generated content. Valued at $1 billion, this partnership represents a strategic hedge into emerging media forms.
Nevertheless, this foray introduces risks. Incorporating Disney’s valuable intellectual property into AI creations may lead to brand dilution and could alienate the creative workforce fundamental to Disney’s longstanding success. This OpenAI partnership was among the final agreements negotiated by Bob Iger, who has been instrumental in Disney’s major acquisitions and licensing deals.
5. Succession Under the Shadow of Bob Iger
Assuming leadership of one of the world’s preeminent entertainment companies under the long shadow cast by Bob Iger presents a significant challenge for D’Amaro. Iger has been closely identified with Disney’s identity and strategy for the past 25 years and notably returned from retirement to stabilize the company after unforeseen difficulties.
The prior succession attempt saw Iger replaced by Bob Chapek, who also previously led the parks and cruises division. However, Chapek’s tenure coincided with the global pandemic’s disruption of Disney’s parks and content production, compounded by internal management conflicts and public relations missteps. Iger’s public opposition to Florida’s controversial "Don’t Say Gay" bill brought political attention into Disney’s affairs, creating tensions that Chapek struggled to manage. The ultimate result was Iger’s return to guide Disney through the crisis.
D’Amaro, who has been part of Disney almost 30 years and has led the parks and experiences segment since 2010, is acutely aware of these dynamics. Disney’s board chair, James Gorman, emphasized in a recent interview that the CEO transition has been approached with greater discipline and structure than before, and expressed confidence that similar turmoil will be avoided. Investors and the public await evidence that this new chapter will meet those expectations.
In sum, Josh D’Amaro inherits a company with outstanding operational performance amid a demanding industry environment. Successfully addressing the decline of traditional television, the evolving streaming battlefield, inconsistent box office returns, competition for consumer attention in an AI-influenced media world, and managing leadership perceptions shaped by Iger’s legacy will define his tenure. How effectively he navigates these multifaceted challenges will shape Disney’s trajectory in the years ahead.