An adolescent sea monster, Marvel’s god of mischief and Cruella de Vil helped Disney’s flagship streaming service attract 12.4 million new subscribers between April and June, more than Wall Street had been expecting.
Disney+ ended the most recent quarter with 116 million subscribers worldwide, the company reported on Thursday. Analysts had been hoping for between 112 million and 115 million. The most popular offerings on Disney+ were “Luca,” an original Pixar film; the superhero series “Loki” starring Tom Hiddleston; and the live-action movie “Cruella,” with Emma Stone taking over as the classic Disney villain.
The quarter, the third in Disney’s fiscal year, was notable for another reason: Disney Parks, Experiences and Products swung to a profit ($356 million) after four consecutive money-losing quarters ($3.6 billion in total). The availability of coronavirus vaccines prompted families to return in large numbers to Walt Disney World in Florida. Disneyland in California reopened on April 30 for the first time in 14 months, although state regulators initially limited capacity to 25 percent, a restriction that has since been lifted.
Disney is the world’s largest entertainment company, with operations that include the ABC broadcast network, ESPN, cruise vacations, stage musicals, book publishing and the Disney Store chain. But investor excitement about streaming has in some ways made Disney a one-business enterprise: At least for the time being, as Disney+ goes, so goes the entire company.
Disney+ grew much faster in its first year than even Disney had expected, surpassing its five-year subscriber goal in just nine months. The pandemic was one accelerant, as families looked for ways to entertain themselves at home. But growth slowed between January and March — Disney+ added 8.7 million subscribers in that period, and Wall Street had hoped for more than 14 million — prompting worries about streaming-service fatigue and leading to a slide in Disney shares.
The company’s stock price rose more than 5 percent in after-hours trading on Thursday.
Disney logged $4.3 billion in total streaming revenue in the quarter, up 57 percent from a year ago. The monthly price for a Disney+ subscription in the United States rose $1 in late March, to $8. Disney+ also generated tens of millions of dollars from “Cruella,” which was made available to subscribers in May — at the same time the film arrived in theaters — for a $30 surcharge. Hulu, which Disney took full ownership of in 2019, benefited from higher advertising revenue and subscriber growth.
Disney said that Hulu had about 42.8 million subscribers, a 21 percent increase from last year. About 15 million people pay for access to the company’s ESPN+ platform, up 75 percent from the same time last year.
But building a portfolio of streaming services is mighty expensive. A variety of costs (content production, marketing, technology infrastructure) contributed to losses for Disney’s streaming unit of roughly $300 million. Still, the division lost twice that amount in the same period a year ago.
Source: | This article originally belongs to Nytimes.com
