Disney+ reaches 116 million subscribers, and its parks division returns to profitability.
A teenage sea monster, Marvel’s God of Evil and Cruella de Vil helped Disney’s flagship streaming service attract 12.4 million new subscribers between April and June, more than Wall Street expected.
Disney + ended the most recent quarter with 116 million subscribers worldwide, the company said Thursday. Analysts were hoping for between 112 million and 115 million. The most popular offerings on Disney + were “Luca,” an original Pixar film; the “Loki” superhero series with Tom Hiddleston; and the live-action movie “Cruella,” with Emma Stone taking over as the classic Disney villain.
The quarter, Disney’s third of its fiscal year, was remarkable for another reason: Disney parks, experiences and products posted a profit ($ 356 million) after four consecutive quarters of losses ($ 3.6 billion in total). The availability of coronavirus vaccines has prompted families to return in large numbers to Walt Disney World in Florida. Disneyland in California reopened on April 30 for the first time in 14 months, although state regulators initially limited capacity to 25%, a restriction that has since been lifted.
Disney is the world’s largest entertainment company, with operations that include the ABC broadcast network, ESPN, cruises, musicals, book publishing, and the Disney Store channel. But investor enthusiasm for streaming has, in some ways, made Disney a sole proprietorship: at least for now, as Disney + puts it, so has the entire company.
Disney + grew much faster in its first year than even Disney anticipated, surpassing its five-year subscriber goal in just nine months. The pandemic has been an accelerator, as families search for ways to be entertained at home. But growth slowed between January and March – Disney + added 8.7 million subscribers during that time, and Wall Street was hoping for more than 14 million – sparking concerns about streaming service fatigue and leading to a decline in Disney shares.
The company’s stock price rose more than 5% on Thursday afternoon.
Disney posted $ 4.3 billion in total streaming revenue in the quarter, up 57% from a year ago. The monthly price of a Disney + subscription in the United States increased from $ 1 at the end of March, to $ 8. Disney + also made tens of millions of dollars from “Cruella,” which was made available to subscribers in May – around the same time the film hit theaters – for an additional $ 30. Hulu, which Disney took full ownership of in 2019, has seen higher ad revenue and subscriber growth.
Disney said Hulu has around 42.8 million subscribers, a 21% increase from last year. About 15 million people pay to access the company’s ESPN + platform, up 75% from the same period last year.
But building a portfolio of streaming services is very expensive. Various costs (content production, marketing, technology infrastructure) contributed to Disney’s streaming unit losses of around $ 300 million. Yet the division lost double that amount in the same period a year ago.
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