Fast Start For Disney Streaming Subscriptions

Walt Disney Co. emerged as a formidable contender in a rapidly escalating battle among online-video platforms, as the number of subscribers to its new streaming service more than doubled in its first three months.

Disney+ had 28.6 million subscribers through Monday, Chief Executive Robert Iger said Tuesday, up from 10 million in November, when the service launched.

“The launch of Disney+ has been enormously successful, exceeding even our greatest expectations,” Iger said on a conference call discussing quarterly financial results.

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He said the service’s trove of older programming, ranging from classic Disney movies to 30 seasons of “The Simpsons,” has been as popular with subscribers as what he characterized as a modestly sized library of new, original content. About 65% of Disney+ users who watched “The Mandalorian,” the buzzy new Star Wars series, watched 10 other movies or shows on the service, Iger said.

The company’s fledgling service is already competing with Netflix Inc. and Amazon.com Inc., in addition to Apple Inc.’s recently launched Apple TV+. But later this year the field will become more crowded with the planned launches of Comcast Corp. ’s Peacock and AT&T Inc.’s HBO Max.

It took Netflix, the largest streaming platform, significantly longer to reach the number of subscribers Disney+ acquired in three months. Netflix started offering streaming in 2007 and created a stand-alone streaming plan in 2010. But it didn’t cross 28 million subscribers until late 2012, according to its financial statements.  Netflix now boasts 167 million subscribers.

Disney+ costs $6.99, versus the $12.99 Netflix charges for its most popular plan.  Subscribers can bundle Disney+ with ESPN+ and Hulu—also owned by Disney—for $12.99 monthly.

Iger said about 20% of Disney+ subscribers signed up through a partnership with Verizon Communications Inc., whose unlimited-data customers are eligible for a free year of the streaming service.

Earnings for the quarter grew with help from healthy business at Disney’s theme parks and the strong performance of animated movie “Frozen 2.”

Excluding certain items, Disney earned $1.53 per share, above the average analyst estimate of $1.44, according to IBES data from Refinitiv. Revenue rose to $20.9 billion, up 36% from a year earlier.

The parks, experiences and products division posted operating income of $2.3 billion, up 9% from the prior year.

TV Newscheck reports the legacy ABC businesses were down for the quarter, although the company didn’t offer specific details. A bright spot was an increase in affiliate revenue (retrans for the O&O stations and the ABC Network’s share of what affiliates received), which was attributed to higher rates. But the broadcasting segment had lower advertising revenues for the quarter, with ad sales down for the O&Os and a drop in average network viewership. The latter was partially offset by high ABC Network rates.