Disney's streaming business found its stride again in fiscal Q1, adding about 11.8 million net subscribers compared to analyst expectations of about 7 million. The analysts at ISI Evercore expect the growth trend to continue in Disney's fiscal year, modeling that The Mouse will add a total of 48 million for the full-year period.
While streaming growth isn't expected to be linear, ISI Evercore analyst Vijay Jayant believes Disney's direct-to-consumer subscriber base will benefit from a ramp-up in content paired with coming launches spanning some 80 regions across the Middle East, Africa and Eastern Europe representing roughly 80 million broadband households.
That bullish view contrasts with recent trends at Netflix, which slightly missed its Q4 2021 subscriber goal and predicted that sub growth would slow significantly in Q1 2022.
Jayant estimates that Disney+ ended 2021 with a reach of 523 million broadband homes worldwide and will end fiscal 2022 with a reach of 613 million – and that's all without any distribution in China.
Speaking on Wednesday's earnings call, Disney CEO Bob Chapek attributed Disney+'s recent subscriber surge to a combination of factors, including organic growth, new market launches, fresh content and a strategic decision to include Disney+ and ESPN+ with all Hulu live TV subscriptions.
He noted that the back half of fiscal year 2022 will feature a flood of new content, including two new Star Wars series (Andor and Obi-Wan Kenobi, set to premiere on May 25), and the debut of a pair of Marvel series (Ms. Marvel and She-Hulk).
Meanwhile, Disney+ has achieved a goal of adding a new title each week, and that output is expected to go higher by 2023, Chapek predicted. Disney's full-year content spend across the board is at about $33 billion (of which about a third is for sports rights), assuming there's no significant production delays because of the pandemic.
Disney+ is already one-third penetrated in the US, but Chapek believes the service still has some headroom for growth. "We are not nearly tapped out on each of the major franchises if someone identifies as a Lucas fan, Star Wars or a as a Marvel fan or as a Disney fan," he said.
Disney also reiterated guidance of 230 million to 260 million paid Disney+ subs worldwide by the end of fiscal 2024.
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— Jeff Baumgartner, Senior Editor, Light Reading