The long-awaited streaming future that Disney promised has finally arrived as cable TV declines.

• Disney's second-quarter results indicate that the company's future strategy is now fully implemented.
• In the second quarter, Disney+ and Hulu generated $47 million in revenue, compared to a loss of $587 million in the same period last year.
• The operating income of linear TV channels decreased by 22% to $752 million, excluding ESPN.

For , the future is now.

Disney's streaming units almost reached profitability for the first time in the second quarter, with a loss of only $18 million between Disney+, Hulu, and ESPN+. This is a significant improvement from the $659 million loss incurred a year ago.

In the second quarter, Disney+ and Hulu made a profit of $47 million, despite losing $587 million the previous year.

The consensus among major legacy media companies is that streaming will eventually replace cable TV as the primary revenue generator. Consequently, Disney and NBCUniversal have established their own subscription streaming services.

This quarter suggests that the moment when Disney's streaming business becomes profitable is finally at hand. It's not just that Disney's streaming revenue is almost breaking even, but it's also that the company's traditional TV ratings are declining.

Disney has long kept ESPN exclusive to its cable bundle due to its profitability within the traditional TV ecosystem. However, this is changing as Disney launches a slimmer cable bundle with Warner Bros. Discovery in the fall, making ESPN accessible outside of traditional cable for the first time. In the future, Disney will introduce its ESPN streaming service, allowing consumers to subscribe to ESPN without a cable subscription.

Disney's second-quarter results reveal the reasons behind the company's decision to pull the plug on ESPN. Although ESPN's revenue increased by 3% to $4.21 billion, its operating income decreased by 9% to $799 million. Lower advertising revenue, a decline in cable subscribers, and higher programming costs due to the College Football Playoff were the contributing factors to this decline, Disney stated.

The decline in revenue and operating income of Disney's other linear networks, such as ABC, Disney Channel, FX, National Geographic, and Disney Junior, was even more alarming. Linear network revenue across Disney's portfolio, excluding ESPN, fell 8% to $2.77 billion. Operating income slumped a whopping 22% to $752 million.

Disney shares fell 5% in premarket trading.

The new reality

Traditional TV is rapidly declining at an unprecedented pace.

Disney has long anticipated this moment and is confident that streaming will become profitable in the fourth quarter, making it a significant growth driver for the company with further improvements in profitability expected in fiscal 2025, according to its earnings release.

The success of Disney's streaming service will determine whether investors accept the new reality. This will depend on the company's streaming execution and the leadership of its CEO Bob Iger's successor.

Disclosure: Comcast's NBCUniversal is the parent company of CNBC.

Disney's earnings surpassed analyst predictions in the latest quarter, with streaming almost reaching breakeven.