OpenAI and Disney have ended a partnership that could have introduced AI-generated videos to Disney+, just as the platform faces slowing growth. Disney+ and Hulu’s share of US TV viewership has remained largely flat in recent years, increasing pressure on new CEO Josh D’Amaro to find new ways to drive engagement.
The deal had allowed OpenAI’s video platform Sora to use iconic Disney characters, while Disney secured influence over how its IP was applied. Plans to feature curated AI-generated short-form content on Disney+ have now been dropped.
Despite this, Disney is continuing with its own short-form push through a new in-app feed, joining competitors like Netflix, Peacock, and Paramount+ in prioritizing mobile-friendly content to capture attention.
Losing Sora removes a key piece of Disney’s strategy, especially as leadership aims to make the platform more interactive and personalized. The company says it will continue exploring AI partnerships while protecting creator rights and intellectual property.
D’Amaro now faces an early challenge: boosting engagement without OpenAI, particularly among younger audiences. Disney+ and Hulu reached a combined 4.9% US viewership share in January, only slightly up from 4.4% in 2021 and below their 2023 peak.
At the same time, free platforms like YouTube have surged, more than doubling their share to 12.5% over the same period, driven by lower costs, interactivity, and strong creator-audience connections.
With competition intensifying and growth slowing, Disney must now rethink its approach to AI, short-form content, and user engagement without OpenAI.