The House of Mouse expands
Only days after Warner Bros., the owner of HBO Max, lifted the lid on its latest set of streaming results, Disney has followed suit. Discovery (WBD), which revealed its streaming results in its most recent set, was closed by Warner Bros. Disney followed suit with its quarterly earnings report (opens in new tab).
Entertainment giant Disney Plus has attracted 12.1 million subscribers between July and September this year. This brings the total global number of users to 164.2 million. Hulu and ESPN Plus also added new paying customers, leaving the House of Mouse with a pool of 235,000,000 subscribers, which is an industry record.
The entire WBD portfolio, which includes HBO Max, Discovery Plus, and HBO Max, currently has just under 95 million subscribers. However, it only gained 2.8 million customers during the quarter before. Netflix gained 2.4 million fewer subscribers during that period, but its global count is still the highest at 223 million.
Disney Plus continues to grow at a rapid pace, out of all streaming services. It still has a long way to go before it can challenge Netflix, which seems to have rebounded after two quarters of decline in 2022.
Plus, subscriber growth does not automatically translate into profit. The company’s fourth quarter results, which are based on a different fiscal year to Netflix and HBO Max, revealed a $1.47 billion loss year-over year despite the positive reading of its customer numbers. This is almost twice the loss Disney suffered in 2021.
But, Disney Plus CEO Bob Chapek is optimistic that the streamer will be profitable sooner than expected – and is rightly proud about how far it has come in such short time.
Chapek stated that Disney Plus’ rapid growth in three years is due to the strategic investment in creating amazing content and expanding internationally. “We expect that our DTC operating losses will decrease going forward, and that Disney Plus still achieves profitability in fiscal 2024, provided we don’t see any significant shift in the economic environment.”
Disney Plus subscribers received a variety of TV shows and movies between June and September 2022. This clearly increased the streamer’s appeal to potential customers. The streaming platform has seen the release of Obi-Wan Kenobi and She-Hulk: Attorney At Law, Pinocchio, Hocus Pocus 2 and Andor in the last three months.
The company’s new Star Wars TV series, top-tier Marvel movies and other offerings will continue to grow in the coming years, so Disney Plus users can eat well for a long time.
Ad-ding value
Disney believes that Disney Plus’s upcoming launch of an ad supported subscription tier will continue the streamer’s remarkable growth. Chapek stated that by adjusting our costs and realizing the advantages of price increases, and the Disney Plus ad supported tier which will launch December 8, we believe we can achieve a profitable streaming company that will drive continued growth as well as shareholder value for many years to come.
According to the Wall Street Journal (opens in new tab), Disney will limit ad time at 4 minutes per hour and stop ads when children are viewing content via its kid-friendly user profiles.
This approach is similar to HBO Max’s June 2013 launch of a cheaper subscription plan. It was a huge success. Netflix also rolled out an ad-supported plan in November 2022, though subscribers have been less-than-complimentary about its early implementation.
The Disney bosses seem to be making every effort to ensure that Disney Plus keeps up with Netflix and continues to outperform HBO Max (on paper at least). Its recent acquisition of overseas broadcast rights for Doctor Who will only help to improve its fortunes.
