Disney adds 14.4 million subscribers to Disney+ – beating Wall St expectations – as CEO Bob Chapek HIKES fees by as much as $3 a month, and plans to launch ad-supported version
- Disney+ added 14.4 million new subscribers in the quarter ended in June
- Together with Hulu and ESPN+, the company now as 221M streaming subscribers
- It takes Disney past Netflix to become the biggest streamer in the world
- Disney+ will also introduce a new ad-supported tier and raise prices in December
- Revenue and profits beat expectations as visitors packed Disney theme parks
- Overall revenue rose 26% from a year earlier to $21.5 billion
Disney beat Wall Street expectations by adding 14.4 million new subscribers to its Disney+ streaming service in the last quarter, CEO Bob Chapek said in an earnings call on Wednesday.
Disney+ now has a total of 152 million subscribers, and together with Disney-owned Hulu and ESPN+ the company has surpassed Netflix to become the biggest streamer, with 221 million total paying subscribers.
The company also announced it will also launch ad-supported versions for Disney+ in December – and will hike the price of ad-free subscriptions for the streaming service, along with ESPN and Hulu.
The new ad-supported Disney+ will cost $7.99 per month, the same price the company now charges for the ad-free version, while the price of the ad-free version will increase by $3 per month to $10.99 as of December 8.
Prices for Hulu will also increase by $1 to $2 per month depending on the plan.
Disney’s financial results for the quarter also blew past analyst expectations, and the company’s shares rose as much as 6.6 percent in extended trading – though the stock is still down 28 percent since the start of the year.
Disney beat Wall Street expectations by adding 14.4 million new subscribers to its Disney+ streaming service in the last quarter, CEO Bob Chapek said in an earnings call on Wednesday
Disney shares rose as much as 6.6 percent in extended trading following the report
At the end of Disney’s third fiscal quarter, Hulu had 46.2 million subscribers and ESPN+ had 22.8 million. Disney+ had 152 million subscribers, for a total of 221.1 subscribers across the three platforms.
Netflix said it had 220.7 million streaming subscribers at the end of the latest quarter, after suffering two consecutive quarters of net subscriber losses.
Netflix’s most popular streaming plan in the U.S. is now $15.50 per month, and its top-of-the-line plan is $20 per month.
It follows several rate hikes to fund expensive original programming, and in search of new revenue streams Netflix has also announced plans to debut an ad-supported tier early next year, though pricing details are not public let.
Disney in 2017 staked its future on building a streaming service to rival Netflix as audiences moved to online viewing from traditional cable and broadcast television.
In the just-ended quarter, Disney added 14.4 million Disney+ customers, beating the consensus of 10 million expected by analysts polled by FactSet.
It came as the service released popular offerings such as the Star Wars series Obi-Wan Kenobi and Marvel’s Ms. Marvel.
Disney will also launch ad-supported versions for Disney+ in December – and will hike the price of ad-free subscriptions for the streaming service, along with ESPN and Hulu
Disney’s growing streaming sales combined with a surge in theme park business after pandemic-era shutdowns, helping the company beat Wall Street expectations on the top and bottom lines.
Overall revenue rose 26 percent from a year earlier to $21.5 billion. A consensus of analysts polled by Refinitiv had projected revenue of $20.96 billion.
Disney posted adjusted earnings-per-share of $1.09, up 36 percent from a year earlier, as visitors packed its theme parks.
Operating income more than doubled at the parks, experiences and products division to $3.6 billion.
Disney’s streaming effort is still losing money, reporting a loss of $1.1 billion for the quarter.
That put a drag on the media and entertainment unit, whose profit declined by 32 percent to nearly $1.4 billion.
‘We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live-sports viewership, and significant subscriber growth at our streaming services,’ said CEO Chapek in a statement.
‘We continue to transform entertainment as we near our second century,’ he added.
Wednesday’s earnings call was the first for CEO Bob Chapek since he received a three-year contract extension.
Chapek finally took full control of the company in January after a prolonged handoff of power from former chairman and CEO Bob Iger, who reportedly clashed with Chapek and grew to regret selecting him as successor.
Since taking over, Chapek has faced challenges including his battle with Florida Governor Ron DeSantis over the state’s so-called ‘Don’t Say Gay’ bill, which led to Disney losing major tax breaks and self-governance powers.
However, the company’s renewal of Chapek’s contract in June appears to be a sign of confidence.
The directors voted unanimously to replace his current deal, which expires in February 2023, with a new three-year agreement that started on July 1.
The board said in a statement: ‘Bob is the right leader at the right time for The Walt Disney Company, and the Board has full confidence in him and his leadership team.’
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