Disney’s flagship streaming service, Disney +, is growing faster than anyone expected – including Disney. But the growth does not tell the whole story.
Disney + now boasts 95 million global subscribers, the company revealed today in its fiscal report for the first quarter (pdf). That is with 74 million in October and just 27 million a year ago. Disney hadn’t thought it would make the number for a few more years, and it gave itself a much higher goal. Disney + is now expected to have around 250 million subscribers by 2024. The service will be available in more than 40 countries in November 2019.
And there is the catch. In two major markets – India and Indonesia – a Disney + notebook is significantly cheaper than in the US and other countries. Disney’s streaming subscribers are soaring, but the average amount of money the company is earning for users is doing the opposite.
The average revenue per user (ARPU) of Disney + dropped to just over $ 4 this quarter, up from $ 5.56 last year. In April, Disney + launched in India as a new brand of Disney’s existing Hotstar service in the country. Then, in September, Disney launched Disney + Hotstar in Indonesia. Both launches helped Disney garner more global subscribers – but it also diminished the platform’s ARPU.
The “VIP” level of Disney + Hotstar in India costs 399 rupees a year – that’s about 45 US cents a month. Disney + in the US costs more than 15 times as much.
Netflix, by comparison, has an ARPU of about $ 11. Disney’s other streaming services – ESPN + and Hulu, which are not available in India or Indonesia – have not seen similar declines in ARPU. In fact, they have each gone up since last year.
Although Disney +’s striking subscriber statistics make sense, the ARPU shows its weakness in considering it as the only measure to evaluate the service’s position in the market. Still, it’s hard to argue that Disney + was anything but a huge success for the Mouse House. The launch was so strong that Disney has already raised subscription prices in the US.