A performer dressed as Mickey Mouse entertains guests during the reopening of the Disneyland theme park in Anaheim, California, US, Friday, April 30, 2021.
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If Disney+’s subscriber growth is any indication, rumors that the global streaming market is nearing saturation have been proven false.
The Walt Disney Company reported on Wednesday that total Disney+ subscriptions rose to 152.1 million in the fiscal third quarter, up from the 147 million analysts had expected, according to StreetAccount.
The company’s shares rose about 5% after the closing bell.
The streaming space has been in a state of upheaval in recent weeks, as Netflix revealed another drop in subscribers and Warner Bros. Discovery announced a change in content strategy. While Netflix expects subscriber growth to pick up, the uncertainty has analysts and investors wondering what the future holds for the industry as a whole.
Also on Wednesday, the company unveiled a new pricing structure that incorporates an ad-supported Disney+ as part of an effort to make its streaming business profitable.
In the fiscal third quarter, Disney+, Hulu and ESPN+ combined to lose $1.1 billion, reflecting the higher cost of content on the services. Disney’s average revenue per user for Disney+ also declined 5% in the quarter in the US and Canada as more customers take cheaper multi-product offers.
Starting December 8 in the US, Disney+ with ads will be $7.99 per month, currently the price of Disney+ without ads. The price of ad-free Disney+ will increase 38% to $10.99, an increase of $3 per month.
Disney also posted better-than-expected earnings on both the top and bottom lines, bolstered by increased spending at its domestic theme parks.
Here are the results:
- Earnings per share: $1.09 per share vs. 96 cents expected, according to a survey of analysts by Refinitiv
- Revenue: $21.5 billion vs. $20.96 billion forecast, according to Refinitiv
- Total Disney+ subscriptions: 152.1 million vs. 147.76 million expected, according to StreetAccount
Disney’s Parks, Experiences and Products division grew revenue 72% to $7.4 billion in the quarter, up from $4.3 billion in the same period last year. The company said it increased attendance, occupied room nights and cruise sailings.
It also announced that its new Genie+ and Lightning Lane products helped increase average ticket revenue in the quarter. These new digital features were introduced to curate the guest experience and allow park visitors to avoid lines for major attractions.
This is breaking news. Check back for updates.