The number of paid subscribers for the Disney+ streaming service beat expectations last quarter as competitor Netflix’s subscriber base slacked, results showed on Wednesday.
Disney+ subscribers surpassed 152 million, up about 31 percent from the same period last year, the entertainment giant said in an earnings report.
Disney’s bottom line was also boosted by rising revenue from its theme parks, which showed signs of recovery from subdued attendance during the pandemic.
Disney’s reported earnings exceeded expectations as many of the tech titans that have thrived during the pandemic contain costs in the face of inflation and people are returning to real-world, rather than online, life.
Disney shares rose more than 6 percent in after-market trading after the earnings results were released.
“We had a terrific quarter with our world-class creative and business teams delivering outstanding performance at our domestic theme parks, strong growth in live sports viewership and significant subscriber growth on our streaming services,” said Bob Chapek, CEO by Disney.
The 14.4 million Disney+ subscribers added in the recently ended quarter brought the total number of subscriptions for its streaming services, which includes Hulu and ESPN+, to 221 million, Chapek added.
Total subscribers to Disney streaming services surpassed Netflix for the first time.
“Investors will breathe a sigh of relief at Disney’s robust (quarterly) fiscal earnings,” said Paul Verna, chief analyst at Insider Intelligence.
“Streaming numbers are being viewed as an indicator of the health of the market, especially after lackluster subscription numbers from Netflix and Comcast.”
Disney also announced that an ad-supported version of its streaming TV subscription service will be available in the United States beginning December 8 at a monthly price of $3 less than the ad-free offering.
– K-Pop and Superheroes –
Taking a page from Netflix’s playbook, Disney has invested in shows produced in locations outside of the United States.
The company plans to “amplify” investments in such local original content, Chapek said, pointing to a film concert and docu-series centered on South Korean music sensation BTS.
He expressed his confidence in Disney theatrical films in the works, including a highly anticipated addition to the Marvel superhero line-up Black Panther: Wakanda Forever.
A trailer for the Black Panther movie racked up more than 170 million views in the 24 hours after its release, Chapek said.
“Disney still faces economic uncertainty and intense competition, but the performance should at least temporarily dispel some of Wall Street’s gloomy perceptions about the company and more generally about the entertainment industry,” said Paul Verna, analyst at Insider Intelligence.
Rival Netflix has reported losing subscribers for two straight quarters as the streaming giant grapples with stiff competition and a tightening viewership belt, though the company has assured investors of better days.
Losing 970,000 paying customers last quarter was smaller than expected, leaving Netflix with just under 221 million subscribers.
“Our challenge and opportunity is to accelerate our revenue and membership growth… and better monetize our large audience,” the company said in its earnings report.
After years of subscriber-building, Netflix lost 200,000 customers worldwide in the first quarter compared to the end of 2021.
Netflix said in its earnings report that it expected to add 1 million paying subscribers in the current quarter.
Netflix executives have made it clear that the company will be tougher on sharing logins and passwords that allow many to access the platform’s content without paying for it.
To attract new subscribers, Netflix said it will work with Microsoft to introduce a cheaper subscription plan with ads.
The ad-supported offering is on top of the three account options already available, with the cheapest plan costing $10 per month in the US.
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