Disney+ Tops Netflix For Streaming Subscribers

Walt Disney Co. reported a 26% jump in revenue Wednesday and more new customers than expected added to its streaming service, but it lowered the bar for anticipated future growth at its Disney+ streaming service.

The Wall Street Journal reports Chief Financial Officer Christine McCarthy on the company’s call with analysts ratcheted down its forecast for Disney+, saying it now expects to sign up between 135 million and 165 million subscribers to its core Disney+ service, and up to 80 million to its lower-cost Asian streaming service, Disney+ Hotstar, for a total range of 215 million to 245 million subscribers by September 2024.

In the three-month period ended July 2, Disney+ gained 14.4 million new subscribers, nearly all of them from outside North America. Analysts were expecting 10 million additions, according to FactSet. The company also announced price increases to its streaming products in the U.S.

The shift in Disney’s streaming forecast signals the difficulties it and rivals, such as Netflix, face in attracting new customers domestically, where streaming options abound and many households use one or more services. Plus, in an increasingly difficult economic environment, some households are rethinking spending on in-home entertainment, industry analysts have said.

Disney+ currently has 152.1 million subscribers. The company has 221.1 million customers across all of its streaming offerings, including ESPN+ and Hulu, bringing Disney’s total just ahead of Netflix in total customers. Netflix last month reported it had 220.67 million subscribers.

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

Chapek attributed the company’s strong results to the performance at its domestic theme parks, big increases in live-sports viewership and the subscriber growth at its streaming services.

Also Wednesday, Disney gave a launch date of Dec. 8 and outlined pricing information for its previously announced ad-supported tier of Disney+ in the U.S., a new product designed to expand the reach of the company’s streaming business.

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

The premium Disney streaming bundle, which includes ad-free versions of Disney+ and Hulu, as well as a version of sports-focused ESPN+ with ads, will remain at its current price of $19.99 a month in the U.S., while a bundle that includes all three services, only with ads on Hulu, will rise in price by $1 a month, to $14.99.