Disney’s streaming service is seeing improved growth, after initially seeing slower numbers of subscriber additions in Q2 as COVID lockdowns and mask mandates came to an end. Today, Disney+ beat analyst expectations for subscriber growth in Disney’s blowout third quarter, reaching 116 million paid subscribers — above the 114.5 million Wall Street had expected — and up over 100% year-over-year.
Disney also exceeded expectations with $17.02 Billion in revenues compared to $16.76 Billion expected. Earnings per share were 80cs above analyst expectations. The parks were even back in operation. __S.5__
Forecasting growth metrics in a variety of industries was difficult due to the pandemic. While Disney+ is a well-respected competitor to Netflix, in a more crowded marketplace it has experienced some downs from COVID effects. Streaming was a popular option in the early days of the pandemic. This March, Disney+ passed 100 million subscribers after just 16 months of operation. Disney executives stated that the service is on track to reach its projected 260 million subscribers in 2024.
However, Disney’s second quarter earnings showed that the economy’s opening had an impact on Disney+ numbers. People now have more to do, than sit and watch television, and vaccines are more readily available. Then, Disney+ only reached 103.6 million subscribers, when analysts were expecting 109.3 million, and the stock slipped as a result.
The effects of COVID on subscriber growth were not only felt by Disney. Netflix had also seen slower subscriber growth earlier in the year due to COVID and its far-reaching effects on things like production delays and release schedules.
But Netflix’s most recent quarter, where it once again topped subscriber estimates, had hinted that Disney+ may see a similar boost. The recent expansions of Disney+ markets in Asia were a key factor in this growth. After previous launches in India, Indonesia and Indonesia last year, Disney+ Hotstar was launched in Malaysia and Thailand.
However, the Hotstar Disney+ version had a lower average monthly revenue per user (ARPU), due to its lower prices. According to Disney, ARPU dropped from $4.62 a $4.16 in Q3 due to the higher number of Disney+ Hotstar subscribers than it was during the previous-year quarter.
Hulu and ESPN+ were not affected by the trend.
Hulu’s subscription service for video jumped from $11.39 – $13.15 over the year. Its Live TV (+SVOD), grew from $68.11 – $84.09. ESPN+ saw a 4 to 47 percent increase from $4.18 and $4.47.
The services also saw an increase in subscribers, with ESPN+ increasing 75% to 14.9 Million customers year-over-year and Hulu total subscribers rising 21% to 42.8 Million.
“…Our direct-to-consumer business is performing very well, with a total of nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of the quarter, and a host of new content coming to the platform,” noted Disney CEO Bob Chapek in a press release.
The direct-to consumer business of Disney saw revenues rise 57% to $4.3 Billion. Operating loss dropped from $0.6 Billion to $0.3 Billion due to better results at Hulu. This was due to higher subscription growth, as well as lower ad revenue.
The gains were partially offset by higher losses at Disney+ due to production, marketing, and technology costs. (Disney’s quarter ended on July 3.)
Publiated at Thu 12 August 2021 22.33:38 +0000