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Disney+ adds 12.1M new subscribers, but streaming losses rise
Entertainment Nov 08, 2022
Courtesy of Glenn Carstens-Peters
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The Disney+ streaming service added 12.1 million subscribers in the fourth quarter of the company’s fiscal year, continuing a major upswing in its direct-to-consumer entertainment business, but the company’s operating losses for streaming services doubled from the same quarter the previous year, according to figures released Tuesday.
The new subscribers gave the Disney+ service a total of 164.2 million subscribers. The company’s ESPN+ streamer boasted 24.3 million subscribers, while its Hulu service had 47.2 million, according the Burbank-based company. That gave the company a total of about 235 million overall streaming subscribers.
But operating losses for the direct-to-consumer division doubled to $1.47 billion in the fourth quarter. The company attributed the change to “a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved results at ESPN+.” Disney noted increased programming, production, marketing and technology costs at the Disney+ service, along with a lack of any “Premier Access” film releases during the quarter that require an additional payment from subscribers.
The fourth quarter last year had two “Premiere Access” releases — “Black Widow” and “Jungle Cruise.”
In a statement, Disney CEO Bob Chapek said he believes the direct-to- consumer losses have peaked.
“The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally, and we expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate,” he said. “By realigning our costs and realizing the benefits of price increases and our Disney+ ad-supported tier coming Dec. 8, we believe we will be on the path to achieve a profitable streaming business that will drive continued growth and generate shareholder value long into the future.
“And as we embark on Disney’s second century in 2023, I am filled with optimism that this iconic company’s best days still lie ahead.”
Disney will introduce an ad-supported tier of Disney+ on Dec. 8, costing subscribers the current rate of $7.99 per month. Maintaining an ad-free version will cost $10.99 per month.
Disney reported $20.1 billion in revenue for the fourth quarter, up from $18.5 billion from the same quarter a year ago. It reported diluted earnings per share of 9 cents, flat from the prior-year quarter. Excluding certain items, earnings per share were reported at 30 cents, down from 37 cents in the prior-year quarter.
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