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.”
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+.”