Disney+ Garners 73M Paid Subscribers In First Year
What do the new Disney+ service and presumptive President-Elect Joseph Biden have in common? They each reported more than 73 million supporters and growing in November.
As part of its fiscal fourth quarter earnings report Thursday, Disney revealed that in just over a year since its launch, the Disney+ premium streaming service had garnered 73.7 million subscribers, up 16 million from the end of the third quarter. (For those keeping count, as of Wednesday Biden’s popular vote total surpassed 77 million.)
To put the subscriber achievement in perspective, Disney had originally forecast the service to reach 60 million to 90 million subscriptions by 2024. The company attributed the significant registration success in part to the COVID-19 pandemic that forced people to shelter at home en mass.
Unfortunately for Disney investors, the windfall from the digital service was not enough to overcome the damage the coronavirus has had on its theme park operations, which have suffered from shutdowns imposed to prevent super spreading.
Disney reported a fiscal Q4 quarter loss of $710 million, compared to net income of $1.054 billion, a year earlier. Revenue fell 23% to $14.7 billion.
Third quarter revenue from the Direct-to-Consumer & International operations increased 41% to $4.9 billion as the segment’s operating loss decreased from $751 to $580 million. The company said the decrease was due primarily to improved results at Hulu and ESPN+.
ESPN+ tallied 10.3 million subscribers, up from 3.5 million a year ago and Hulu had 36.6 million subscribers, up 28% from a year ago. Hulu had 32.5 million subscription video on demand (SVOD) subscribers, up 27% and 4.1 million Live TV plus SVOD subscribers, up 41%.
Disney said the improvement at Hulu was due to both subscriber growth and increased advertising revenue driven by higher impressions, partially offset by an increase in programming and production costs. ESPN+ enjoyed revenue increases from subscriber growth and greater pay-per-view revenue from the Ultimate Fighting Championship events.
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The decrease at international channels was due to lower affiliate and advertising revenues, partially offset by a decrease in costs driven by lower general and administrative expenses and bad debt recoveries, said Disney.
Revenue from Media Networks increased 11% to $7.2 billion in the quarter while operating income increased 5% to $1.9 billion. Cable Network revenue rose 11% to $4.7 billion while operating income decreased 7% to $1.2 billion.
Broadcasting revenue for the quarter was up 10% to $2.5 billion and operating income increased 47% to $553 million.
Advertising revenue was comparable to the same period last year, the report showed.
Forecasting future quarters, the company said it expects ESPN’s first-quarter results will be impacted by higher rights and production costs, due to a shift of four NBA finals games and three additional college football playoff games into the quarter. However, that should be offset by a delay to the start of the next NBA Season.
The company expects Q1 operating results from the Direct-to-Consumer businesses to decline by approximately $100 million from the prior year due to continued investment in Disney+, combined with improved results at both ESPN+ and Hulu.
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By Greg Tarr
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