Disney reports earnings increase, lowers long-term expectations for Disney + subscribers

Just a few months ago, Disney CEO Bob Chuckle said the company’s previous target of 230 million to 260 million Disney+ subscribers, set in December 2020, was “very achievable.”

In the three months ending July 2, Disney+ gained 14.4 million new subscribers, nearly all of them outside of North America. Analysts had expected 10 million additions, according to

set of facts.

The company also announced a price increase for its streaming products in the US

Disney’s results this quarter reflect the difficulties it and its competitors face, such as

NetflixAnd the

In attracting new customers locally, streaming options abound and many households use one or more services. Additionally, in an increasingly challenging economic environment, some families are rethinking spending on home entertainment, industry analysts said.

Disney shares are up more than 6% in after-hours trading to about $120.

Disney+ currently has 152.1 million subscribers. The company has 221.1 million customers across all streaming offerings, including ESPN+ and Hulu, making Disney’s total customers outperform Netflix in total customers. Netflix reported last month that it has 220.67 million subscribers.

Overall, in the third quarter, the world’s largest entertainment company reported earnings of $1.41 billion, or 77 cents a share, up from $918 million, or 50 cents a share, in the same period last year. Revenue increased to $21.5 billion, above the average analyst estimate of $20.99 billion on FactSet.

Sales in the Parks, Experiences and Products division — which includes Disneyland, Walt Disney World, four resorts in Europe and Asia and have historically been Disney’s most profitable segments — reached $7.4 billion for the quarter, a record high and an increase of 70% from the previous year. The division generated $2.2 billion in profit for the prior quarter, up from $356 million a year ago.

Mr. Chapek attributed the company’s strong results to performance in its local gardensSignificant increases in viewership of live sports broadcasts and growth in the number of subscribers to live broadcasting services.

Of the 14.4 million subscribers added to the service, only 100,000 came from the US and Canada, a sign that the streaming service may reach saturation point in North America. Netflix I lost 1.3 million subscribers in the US and Canada and adding new customers only in the Asia Pacific region.

Over the past year, Mr. Chapek and other senior Disney executives have indicated an increased focus on international markets to grow the streaming business. Disney spends heavily on producing hundreds of local TV shows in countries such as India, and during the summer, Disney+ launched in 53 new countries and regions, primarily concentrated in Eastern Europe, the Middle East, and North Africa.

Disney+ subscription pricing in many of these new markets is well below the $7.99 per month US customers pay. However, Disney+’s average monthly revenue per paying subscriber – a key metric in the streaming business – was $6.27 in North America, compared to $6.29 internationally, excluding the more expensive Disney+ Hotstar service in Asia.

Disney + Hotstar, the service used by 58.4 million Disney subscribers in India, generates just $1.20 per month per user. In June, it was Disney Bidding for broadcasting rights Broadcasting cricket matches in the Indian Premier League is a huge draw for Hotstar service, which many analysts and former Disney executives expect will result in millions of canceled accounts over the next year.

Overall, Disney’s direct-to-consumer segment, which includes video streaming, lost $1.1 billion in the third quarter, expanding from a loss of $293 million a year earlier. Since the launch of Disney+ in late 2019, the sector has lost more than $7 billion.

Also on Wednesday, Disney gave the December 8th launch date and set pricing information to announce earlier Ad-supported layer from Disney+ in the US, a new product designed to expand the company’s live streaming business.

The price for the standalone, ad-free Disney+ service will increase from its current level of $7.99 per month in the US to $10.99 per month, or $109.99 per year. The new basic Disney+ service with ads will cost $7.99 per month.

The Disney streaming bundle, which includes ad-free versions of Disney+ and Hulu, as well as a sports-focused version of ESPN+ with ads, will remain at its current price of $19.99 per month in the US, while the bundle includes all three services. Just with ads on Hulu, their price will go up by $1 per month, to $14.99.

–Sarah Cross contributed to this article.

Corrections and amplifications
Disney+ launched in 53 new countries and territories over the summer. An earlier version of this article incorrectly stated that it was launched on the 54th. (Corrected August 10th)

write to Robbie Whelan at [email protected]