Unlike Netflix, The Walt Disney Company's streaming business did not disappoint to start off 2022. The company beat streaming subscriber estimates in its fiscal Q2, adding 7.9 million Disney+ subs in the period, and raising Disney+'s global total to 137 million, beating an expected 135 million.
Disney+ ended fiscal Q2 with a domestic subscriber base (US and Canada) of 44.4 million, up 19% year-over-year. The service's international base (excluding Disney+ Hotstar) climbed 28%, to 87.6 million. Disney+ Hotstar, a service focused on India, Malaysia and Thailand that carries a lower average revenue per user (ARPU) than Disney+ does in other markets, ended Q2 with 50.1 million subs, up 42%. Global Disney+ ARPU rose 9% to $4.35.
The increase at Disney+ comes ahead of a plan to launch an ad-supported version of the streaming service for the US in late 2022 and follow with versions for international markets sometime in 2023. The current ad-free and coming ad-supported tiers will both feed into Disney's target to have between 230 and 260 million Disney+ subscribers by the company's fiscal Q4.
Hulu's subscription VoD service had 41.4 million subs, up 10%, while the Hulu Live TV/SVoD combo service ended the quarter with 4.1 million subs, up 8%. With everything rolled up, Hulu ended the quarter with 45.6 million subs, up 10%.
On the financial side, Disney+'s direct-to-consumer (DTC) unit, which runs Disney+, Hulu and ESPN+, generated revenues of $4.9 billion, up 23%.
But the DTC division also swung to a loss of -$877 million, widened from a year-ago loss of -$290 million. Disney blamed the wider losses on higher losses at Disney+ and ESPN+, coupled with lower operating income at Hulu. Disney+ losses increased due to rising programming, production marketing and technology costs, the company said.
Disney posted total fiscal Q2 revenues of $19.2 billion, below the $20.1 billion expected by analysts.
Some analysts and investors were worried about a streaming slowdown at Disney after Netflix lost 200,000 subs in the first quarter of 2022. But Disney's better-than-expected results in the streaming category didn't immediately lead to a rebound in The Mouse's stock price. Disney shares were down $2.51 (2.39%) to $102.70 in after-hours trading Wednesday.
- Netflix shares plummet 25% amid loss of 200K subs, slowing revenues
- Disney sizing up ad-supported version of Disney+ – report
- Jeremy Doig departs Google to become CTO of Disney Streaming
- Disney's streaming biz bounces back
— Jeff Baumgartner, Senior Editor, Light Reading