On August 10, Walt Disney’s CEO Bob Iger has acknowledged the prevailing challenges in the entertainment industry while underlining the company’s dedication to cost reduction and creative innovation. Despite revealing some weak points in quarterly results, Disney’s stock surged by nearly 3 percent in after-hours trading.

Iger spotlighted a remarkable $1 billion improvement in operating income within the company’s streaming business over the past three quarters, to achieve profitability by 2024.

He also emphasized the necessity of enhancing the quality of Disney’s films, preparing the sports brand ESPN for direct consumer streaming, and addressing ongoing strikes by writers and actors in Hollywood, which have disrupted film and television production, Reuters reported.

“I returned to Disney in November, and I’ve agreed to stay on longer because there was more to accomplish before our transformation is complete,” Iger said, describing a “challenging environment in the near term.”

The company beat Wall Street’s profit expectations for its fiscal third quarter and said it was on track to cut costs by more than the $5.5 billion it promised investors in February.

Disney also posted quarterly revenue below expectations and fell slightly behind analyst projections for U.S. subscribers of Disney+.

Looking for ways to attract and retain subscribers in a competitive streaming market, Disney also announced it would launch ad-supported streaming in Europe and Canada and provide U.S. subscribers with a new, ad-free package in the coming months.

Iger said he would address the issue of password sharing next year, echoing Netflix (NFLX.O).

He said Disney will reduce the number of titles it releases and also the cost per title.

(Photo Credit: Reuters)