Disney catches up with Netflix with streaming services
Disney has caught up with long-time market leader Netflix with its streaming services. The Disney+, Hulu and ESPN+ services together had around 221 million subscribers in the past quarter. Netflix recently had about the same number after losing around one million subscribers.
At the same time, with the launch of a version with advertising, Disney+ customers will have to prepare for a surcharge if they want to continue watching the program without interruptions. The U.S. entertainment giant has so far accepted high losses in the streaming business.
Disney+, where films and series from the world of Marvel comics and "Star Wars" can be found, was once again the clear growth driver in the past quarter. The service, which was only launched in November 2019 as a Netflix hunter, gained 14.4 million customers within three months and now has a good 152 million subscriptions.
Disney+ recently scored two hits with the Star Wars series "Obi-Wan Kenobi" and Marvel's "Ms. Marvel. Industry observers see the many streaming services competing to establish themselves as indispensable to consumers in the face of inflation and economic concerns.
Indian market underestimated
The growth at Disney+ was well above analysts' expectations. The Indian market also played a key role, adding around eight million subscribers and bringing the Disney+ Hotstar service to a good 58 million customers. However, Disney withdrew from the bidding war for cricket matches there, which are currently a crowd puller for the service.
In the U.S., meanwhile, the number of Disney+ subscribers stagnated at 44.5 million, as the group announced after the U.S. stock exchange closed on Wednesday. In the entire international business outside India, Disney+ now comes to 49.2 million customers - an increase of six million within three months.
Important difference: In India, the Group takes in an average of just $1.20 per customer per month, compared with around $6.30 in the U.S. and other countries.
The sports service ESPN+ now has just under 23 million subscribers, and Disney's third streaming service Hulu has 46 million users. In foreign markets - such as Germany - content from Hulu and Disney's TV channel ABC is included in the Disney+ app.
Loss due to high production costs
The operating loss of Disney's streaming business shot up to a good one billion dollars. In the same quarter last year, the loss was significantly smaller at 293 million. Among other things, the Group points to the high production costs.
Disney is using the popularity of the services to test the potential for price increases. In the U.S., for example, the previous price of $7.99, effective Dec. 8, applies to the version of Disney+ with advertising. Those who want to continue watching ad-free will have to pay $10.99. On Hulu, the price goes up by $1 to $2 per month, depending on the subscription model.
ESPN+ also recently announced a price increase in the US. Netflix is also currently rolling out a version with advertising and hopes to launch it at the turn of the year. In a conference call with analysts, Group CEO Bob Chapek expressed his conviction that the price increase would not lead to an exodus of customers in the long term.
Meanwhile, the entertainment empire's money was made by the classic business with the TV cable division as well as film studios, theme parks, resorts and cruise ships. Revenues from the theme park division, for example, jumped 70 percent to $7.4 billion compared to the year-ago quarter, which was dominated by Corona measures, and operating profit multiplied to $2.2 billion.
"We had an excellent quarter," Chapek announced. Group sales grew 26 percent to $21.5 billion. Profit rose 53 percent to 1.4 billion dollars (1.36 billion euros). (SDA)