Disney+ hits 164.2 million subscribers as it plans for price hike

Disney store windows seen decorated with rainbow colors at the Oxford Circus in London. The company had reported earnings of 30 cents per share, missing the mark of 56 cents per share. (SOPA IMAGES VIA BENZINGA)

By Chris Katje

Disney+ hits 164.2 million subscribers as it plans for price hike
General views of Sleeping Beauty Castle at Disneyland on August 14, 2022, in Anaheim, California. The Walt Disney Company revenue is down 3% from the prior year in the media and entertainment segment. (AARONP/BAUER-GRIFFIN VIA BENZINGA)

Media giant The Walt Disney Company (NYSE: DIS) reported fourth-quarter and full-year financial results after market close Tuesday. The company reported fourth-quarter earnings per share of 30 cents, missing a Street estimate of 56 cents per share. The company is currently planning to add advertisements to its Disney+ streaming service. 

Fourth-quarter revenue for the Magic Kingdon’s media and entertainment segment was $12.7 billion, down 3% year-over-year. The direct-to-consumer sector of this segment had growth of 8% year-over-year, the only positive sub-segment. The company’s Parks, Experiences and Products segment had revenue of $7.4 billion in the fourth quarter, up 36% year-over-year. Operating income in the fourth quarter was down 91% for the Media segment and up over 100% for the Parks segment.

Disney+ hits 164.2 million subscribers as it plans for price hike
CEO of Disney Bob Chapek attends Marvel Avengers Campus opening ceremony at Disneyland Paris on July 09, 2022, in Paris, France. Disney saw an increase over 14 million subscribers including Disney+ in the fourth quarter. (LAURENT VITEUR VIA BENZINGA)

For the full fiscal year, Disney had revenue of $55 billion for its Media segment, up 8% year-over-year, and $28.7 billion for the Parks segment, up 73% year-over-year. Operating income for the full year was $4.2 billion for the Media segment and $7.9 billion for the Parks segment.

“2022 was a strong year for Disney, with some of our best storytelling yet, record results at our Parks, Experiences and Products segment, and outstanding subscriber growth at our direct-to-consumer services, which added nearly 57 million subscriptions this year for at total of more than 235 million,” Disney CEO Bob Chapek said.

The company’s fourth quarter and full year were headlined by the results of the company’s streaming platforms, including Disney+, Hulu and ESPN+. Overseas markets have traditionally been another growth area for Disney. Where first Disney sought to build theme parks, in this century streaming subscriptions have become just as importnat. 

“Disney+ has also started to build an exclusive anime library, underscoring strategies towards content differentiation in a maturing [subscription video on demand] environment”” said Vivek Couto, Media Partners Asia’s managing partner in a recent interview.

The company ended the fourth quarter with the following subscriber counts for its streaming platforms:

Disney+ Domestic: 46.4 million, +2% year-over-year

Disney+ International ex. 

Hotstar: 56.5 million, +57%

Disney+ Hotstar: 61.3 million: +42%

Total Disney+: 164.2 million, +39%

ESPN+: 24.3 million, +42%

Hulu: 47.2 million, +8%

The company’s core Disney+ subscribers which count domestic and international without Hotstar were up 38% in the fourth quarter. Disney noted the average revenue per Disney+ subscriber was down 10% domestically and 5% globally.

“Our fourth quarter saw strong subscription growth with the addition of 14.6 million total subscriptions, including 12.1 million Disney+ subscribers. 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,” Chapek said.

Disney is set to launch its ad-supported version of Disney+ on Dec. 8. The company will raise the price of its existing basic plan, which will force subscribers to keep the ad-supported plan at the same price or pay more for the ad-free plan. This could help raise the average revenue per subscriber.

“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,” Chapek noted.

DIS Price Action: Disney shares are down 6.20% to $93.77 in after-hours trading Tuesday.

With additional Reporting by Joseph Hammond. Produced in association with Benzinga.

Edited by Alberto Arellano

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The post Disney+ Hits 164.2 Million Subscribers As It Plans For Price Hike appeared first on Zenger News.

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