Disney+ Growth Slows

It wasn’t that long ago that some believed that Disney+ would overtake Netflix. But that potential future is less certain today, with The Walt Disney Company reporting that growth in its streaming service slowed dramatically in the most recent quarter. Maybe it can blame the component shortage?

“As we celebrate the two-year anniversary of Disney+, we’re extremely pleased with the success of our streaming business, with 179 million total subscriptions across our [direct to consumer] portfolio at the end of fiscal 2021 and 60 percent subscriber growth year-over-year for Disney+,” Walt Disney Company CEO Bob Chapek said. “We continue to manage our DTC business for the long-term, and are confident that our high-quality entertainment and expansion into additional markets worldwide will enable us to further grow our streaming platforms globally.”

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While Disney+ did experience 60 percent subscriber growth YOY, the service only added 2 million new subscribers in the previous quarter, indicating that it has hit a plateau. Disney+ now has 118.1 million subscribers, while Hulu has 43.8 million total subscribers and ESPN+ has 17.1 million subscribers. (Hulu’s live TV service only has 4 million subscribers.)

Disney’s direct-to-consumer business delivered an operating loss of $630 million on revenues of $4.56 billion in the quarter ending October 2; revenues were up 38 percent YOY. (That business is part of Disney Media, which reported revenues of $13 billion, up 9 percent YOY.) Disney noted that these losses were attributed to higher losses at Disney+, which offset improved results at Hulu and, to a lesser extent, ESPN+.

“The higher loss at Disney+ was due to higher programming and production, marketing, and technology costs, partially offset by increases in subscription and Premier Access revenues,” the firm explained. “Higher subscription revenue reflected subscriber growth and increases in retail pricing. Higher Premier Access revenue was due to two releases in the current quarter, Black Widow and Jungle Cruise, compared to one release in the prior-year quarter, Mulan. The increases in costs and subscribers reflected the ongoing expansion of Disney+.”

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Conversation 9 comments

  • j5

    11 November, 2021 - 9:36 am

    <p>We didn’t renew our subscription because there’s nothing on it that interest us right now. My kids aren’t interested in the kid content, which is the majority on it. We’ve already seen all the StarWars and Marvel movies and shows. I’ll re-subscribe when Mandalorian comes back for season 3. But I already own all the StarWars movies on DVD so why pay when I can watch them for free? I think they would’ve had a very good chance of surpassing Netflix if they included all the Fox properties they acquired in Disney+. Just make an “grown up” section or just that content to only show if you have an adult profile. All us income earning adults that grew up on 80s actions movies would ABSOLUTELY keep paying for Disney+ to watch all that horrible acting high action goodness lol. I think the momentum is gone for Disney+. The pause after EndGame and pandemic killed the MCU demand. StarWars is a COW but not for old school fans other than Mandalorian. I mean Disney+ will remain strong because families with young kids and hardcore Disney fans. But Netflix has so much more variety now. Not even comparing the other streaming services either. It’ll be interesting to see what Disney does with their Fox properties and the Marvel rated R stuff like DeadPool. </p>

    • Paul Thurrott

      Premium Member
      11 November, 2021 - 9:39 am

      <p>Right. When it comes to streaming services, there’s Netflix … and then other things. If I had to keep just one, the choice is obvious.</p>

      • SyncMe

        11 November, 2021 - 11:07 am

        <p>I don’t find any of the new stuff on Netflix appealing at all. If I didn’t get Netflix as part of my T-Mobile plan I would have canceled it. </p><p><br></p><p>There is a lot of new stuff on Disney+ every month, including the new Boba-Fet series next month.</p>

    • tedcrilly

      11 November, 2021 - 9:43 am

      <p>The section for Fox and TV properties is available in certain international markets – its called Star. </p><p><br></p><p>I’d say its not available in the US because of licencing issues it might create with Hulu. </p>

    • red.radar

      Premium Member
      11 November, 2021 - 12:47 pm

      <p>I respect this view point. However I am in the "I have young kids" category. We got rid of everything but Disney+. Two main reasons.</p><p><br></p><ol><li> After a long day of managing our careers and raising children the last thing we want is another source of noise. The silence that comes over the house after the kids go to sleep is precious to us. We choose to read. </li><li> I don’t have to worry about managing content access. Disney+, PBS Kids and the Plex app are all that exist on our streaming devices. So I don’t have to worry about what my kids would stumble into. I know there are ways to setup "the apps" to manage this but because of point 1, I am not as invested to learn how to do that. </li></ol><p><br></p><p>As time progresses we will come back to the other offerings, but the Disney+ subscription works for us and grateful that someone has decided to cater to this market. </p>

  • jgraebner

    Premium Member
    11 November, 2021 - 1:50 pm

    <p>I’m not sure this is really a big indicator of the long term viability of the service as they didn’t offer much high-profile content during the last quarter. I think this is referring to July-September. The last episode of Loki was released on July 14 and the only new Marvel or Star Wars content since then was all animated. I wouldn’t be surprised at all if the service makes up most or all of the difference in the October-December quarter, with both "Hawkeye" and "The Book of Boba Fett" debuting, plus Disney’s major 2021 summer theatrical releases ("Black Widow", "Shang-Chi" and "Jungle Cruise") all being released as non-premium titles during that time frame.</p>

  • Daekar

    11 November, 2021 - 2:00 pm

    <p>I don’t really see much value in Netflix – it’s mostly filler nonsense to me – but I also struggle to find constant value in Disney+. We still have a subscription, but I almost never use it… I am not sure my wife will want to maintain it again next year. I am really only interested in The Mandalorian. Maybe The Clone Wars if I run out of things on YouTube… </p>

  • rmorrissey

    11 November, 2021 - 2:59 pm

    <p>Wait until Thanksgiving, when they get 6 hours of the Beatles from Get Back. I’m sure they’ll see a spike (maybe a short lived one) from that.</p>

  • rm

    12 November, 2021 - 9:33 am

    <p>We have the Disney+, ESPN+, Hulu bundle. To get Hulu live TV we had to cancel that bundle and wait until the last month we had paid for ended (per the online documentation), then purchase Hulu live TV, Disney+, and ESPN+ (with no bundle discount). So, while I almost did this; that is to many hoops to jump through BTW, just because Hulu considers Disney+ third party billing.</p><p><br></p><p>I looked at the competition to compare Hulu live TV with Sling and YouTube TV. I found that (and I don’t like Google) that YouTube TV had more chanels, more concurrent streams, more saved DVR space, and lower cost than Hulu live TV. So, we kept the Disney/ESPN/Hulu bundle for now and added YouTube TV. Stupid of Disney to not fix this!</p>

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