Disney + remains the leader in the range of new streaming services, reaching 94.9 million subscribers in the quarter ended January 2, but average revenue per user fell 28% from the previous year.
The growth of subscribers was at the end of the analysts’ analysis. ESPN + now stands at 12.1 million subscribers, almost double the amount of a year ago, and Hulu has increased by 30% to 39.4 million subscribers in its on-demand service and the Hulu + Live TV bundle. With 4 million subscribers on the live bundle, Hulu is now the fifth largest pay-TV operator in the US
The numbers were highlighted in the company’s fiscal earnings report for the first quarter. Overall results exceeded Wall Street analysts’ expectations, despite a $ 2.6 billion price tag for its quarterly theme parks due to the effects of Covid-19. Streaming has become the northern star for Disney, with investors largely rewarding their growth potential and looking out over the 2020 financial wreck.
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Direct-to-consumer revenue rose 73% to $ 3.5 billion in the quarter, with operating losses up to $ 466 million from $ 1.1 billion a year ago. Management has predicted the current business forecast by fiscal 2024, but trends suggest it may come in the black sooner.
Average revenue per user, a key measure of the streaming business, has long been a concern internally and among some investors – hence the planned price increases for Disney + next month. In the last quarter of 2019, when Disney + was launched, its ARPU was $ 5.56. The inclusion of the service as a no- or low-cost option for existing Hotstar subscribers has boosted its global growth turbo, but also limited revenue, at least for the short term.
Disney gained control of Hotstar in the $ 71.3 billion Fox deal and positioned the South Asian media powerhouse as a key to its growth plans. The Disney Plus Hotstar bundle includes the Disney + offer for less than two dollars a month in one popular subscription plan, indicating that up to one-third of the 94.9 million Disney + subscribers enter through Hotstar.
Hulu was at the other end of the ARPU spectrum, reaching $ 75.11 for the live TV bundle plus the on-demand service, by 26%. ESPN + remained relatively flat compared to a year ago at $ 4.48.
At its investor day in December, Disney announced that it had reached 86.8 million subscribers to Disney +. The last quarter of 2020 includes the release of the Pixar film Soul on Christmas Day, which indicated numbers of third parties, was widely seen. Disney has revealed virtually no viewer details about content on Disney +, including feature films that have been moved there due to the coronavirus pandemic. Soul has played in various international areas and brought in more than $ 100 million and sailed especially in China.
On the international front, the Indian Premier League cricket matches end on Disney Plus Hotstar in November last year, and Verizon’s bundle agreement with Disney + was terminated after its initial launch in November 2019. Although newer Disney promotions have been announced, Verizon said about one-third of customers who signed up for the original Disney bundle did not renew. Despite the headwinds and questions about the upcoming price increases, Disney significantly strengthened its internal projections on Investor Day. The company now expects Disney + to have 230 to 260 million subscribers by 2024 (more than three times its lead in 2019), with 300 to 350 million subscribers in all three of its key services.
Netflix continues the pace for all streamers, with 203.7 million global subscribers by the end of 2020.