(San Francisco) The Disney+ platform added 14.4 million new subscribers between March and June, bringing its total to 152 million, reassuring a market worried about the risks of digital service saturation as the Pandemic-related boom took hold faced with runaway inflation.
Posted at 6:14 p.m
Collectively, Disney’s streaming platforms (Disney+, Hulu, and ESPN+ for sports) now have 221 million subscribers, more than Netflix, the industry veteran, whose paid subscriber count fell to 220.67 million at the end of June.
The entertainment giant, which took up more than 6% in the stock market during after-hours electronic trading, also unveiled a new cheaper Disney+ subscription formula with ads, according to a press release also released on Wednesday.
Overall, Disney reported revenue for the third quarter of its staggered fiscal year up 26% year over year to $21.5 billion, a number that also beat analysts’ expectations.
Net income increased by half to $1.4 billion within a year.
Its amusement parks and merchandise have fully benefited from the resumption of in-person activities as the pandemic eases its grip on daily life around the world. The segment brought in $7.4 billion in revenue, up 70% from a year ago.
“Sigh of Relief”
“Disney’s core businesses, including theme parks and cinemas, are recovering but still facing headwinds, including the unusually lukewarm reception of Pixar’s latest animated feature. light year noted Insider Intelligence’s Paul Verna.
Disney+, on the other hand, keeps delighting the market.
“Investors will breathe a sigh of relief,” said the analyst. The platform’s numbers are “taken as a sign of the good health of the market, especially after poor results from Netflix and Comcast.”
Launched as a cannonball on the streaming scene in late 2019, Disney+ now captures more than 45% of streaming service users in the US, behind YouTube, Netflix, Amazon, and Disney-owned Hulu, according to insider numbers.
As the pandemic has hit the entertainment empire’s personal dealings hard, Disney+ has taken off thanks in part to its massive catalog and blockbuster franchises.
But the group’s massive investments are far from paying off: in the past quarter, Disney’s three streaming platforms increased their net losses by $300 million to $1.1 billion.
“We remain confident that Disney will be profitable in 2024,” Chief Financial Officer Christine McCarthy said on the analyst conference call.
Still, she revised down certain targets and projected 215 to 245 million subscribers for Disney+ by 2024 (including those from Hotstar, the Indian version of the site), or 15 million fewer than previously announced.
Star Wars and K-Pop
To do that, “Disney needs to decide if it’s trying to expand beyond family content,” commented Third Bridge analyst Jamie Lumley.
In the current quarter, Bob Chapek, the head of the American group, is betting on new programs to attract new customers, such as “She-Hulk: Lawyer”, the new series from Marvel Studios, Andora Star Wars series and the movie Hocus pocus 2 by Disney.
During the conference call with analysts, he also promised a documentary series about BTS, the K-pop cult group.
Last quarter was marked by doubts about the growth of the major entertainment platforms, from Netflix to Facebook to video games.
Netflix lost nearly a million subscribers between March and June, after losing several in the first quarter, for the first time in its history.
In addition to new content, the industry veteran and its stalwart competitor are now employing different strategies to grow their subscriber base and improve profitability.
Disney+ on Wednesday unveiled a new US-advertised subscription plan for $8 a month, starting in December. The one without ads will go up to $11 or $3. Hulu’s prices will also increase.
And Netflix, which is preparing a similar option after years of shunning this less-prestigious solution, will also turn the tide on the shared identifiers side, allowing many people to access its content without paying.