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Video/Media

Disney's streaming biz bounces back

Disney's saw the subscriber end of its all-important streaming business rebound in fiscal Q1, as the number of new customers climbed across Disney+, Hulu and ESPN+.

Those gains drove Disney's overall direct-to-consumer (DTC) revenues higher in the period, but rising programming and production costs contributed to widening DTC-related operating losses.

Disney+'s subscriber totals at the end of fiscal Q1 handily beat analysts' expectations, causing shares to rise in after-hours trading Wednesday.  
(Image source: Tero Vesalainen / Alamy Stock Photo)
Disney+'s subscriber totals at the end of fiscal Q1 handily beat analysts' expectations, causing shares to rise in after-hours trading Wednesday.
(Image source: Tero Vesalainen / Alamy Stock Photo)

Disney added 11.7 million Disney+ subs in the period, extending its grand total to 129.8 million, up 37% year-over-year. That handily beat analysts' expectations that Disney+ would end the quarter with 124.7 million subs. Disney shares were up $11.25 (7.64%) to $158.48 in after-hours trading Wednesday.

The fiscal Q1 improvement followed a lackluster prior quarter in which the company added just 2.1 million Disney+ subs. The company expects Disney+ to reach 230 million to 260 million subs by 2024.

The average revenue per user (ARPU) for Disney+ hit $4.41, up 9% year-on-year. That was due to increases in retail pricing for Disney+'s domestic and international services. Disney+'s ARPU also got a small lift from market expansions of Disney+ Hotstar, a lower-margin service offered in India, Malaysia and Thailand.

Hulu's base of SVoD and pay-TV subs rose 15%, to 45.3 million. Hulu's Live TV + SVoD combo added 300,000 subs in the period, for a total of 4.3 million. Hulu's live TV offering saw ARPU jump from $75.11 to $87.01 million due to price increases and higher per-subscriber ad revenues, the company said.

ESPN+, Disney's premium sports-focused streaming service, added 4.2 million subs, extending its total to 21.3 million.

Revenues climb and losses mount at Disney's DTC biz

On the financial end, Disney's DTC unit revenues jumped 34%, to $4.7 billion, but operating losses widened 34%, to -$593 million. Disney blamed the rising DTC losses on higher programming, production, marketing and technology costs at Disney+.

Revenue at Disney's linear networks unit was flat, at $7.7 billion.

Revenue for Disney Media and Entertainment rose 15%, to $14.58 billion, and total company revenues increased 34% to $21.81 billion.

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— Jeff Baumgartner, Senior Editor, Light Reading

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