Disney+ beats four year target in 14 months with 95 million subscribers

WandaVision

Disney+ has continued its march towards 100 million subscribers, ending Q1 2021 with 94.9 million users globally.

The figure is up from the 86 million subscribers declared at Disney’s December investors day, and means that Disney+ has surpassed its four-year goal in just 14 months. As such, Disney has revised that goal to a much more lofty target of 230-260 million subscribers by 2024.

In positive reading for Disney, the subscriber count was tallied on January 2 which includes holiday surges from the launch of Pixar’s Soul and the final episodes of The Mandalorian’s second season but would not factor in the viral hit that is Marvel series WandaVision. With the show dominating discussions online, it is likely that Disney+ has already surpassed 100 million subscribers.

While Disney+ is the clear driving force behind Disney’s DTC business, Hulu and ESPN+ continue to perform well with 39.4 million and 12.1 million subscribers respectively. The segment’s revenue was up 73% year-over-year to US$3.5 billion, though ARPU has dropped to US$4.03 due to the lower cost of Disney+ Hotstar in India and Indonesia.

Speaking on the company’s earnings call, CEO Bob Chapek described Disney+ as “a great price-value relationship” and said that there’s “no better way to do it than powerhouse franchises cranking out regular new releases on a monthly basis.”

Chapek also spoke about Star, the major expansion to Disney+ in international markets which will incorporate a significant amount of content from its more adult-oriented studios and networks like ABC and 21st Century Fox. He said that Star “will offer thousands of hours of movies and television from the company’s multiple studios” and be integrated into Disney+ as “a distinct sixth brand tile.”

This is also the first quarter in Disney’s reporting since its October 2020 restructuring that sees DTC, linear networks, content sales/licensing (which includes theatrical, home entertainment and third-party TV and SVOD distribution) feed into a single media and entertainment distribution. This model, which Disney previously said would allow it to be more responsive to consumer demands, will allow the company to offset potential box office slip-ups with the ongoing streaming success.

Bob Chapek

While the company continues to go from strength-to-strength in terms of streaming, Disney is still being felt by the impact of the Covid-19 pandemics on its theme parks division. The segment saw a dip to US$3.59 billion, down from Q1 2020 revenues of US$7.59 billion, while it ended the quarter with a operating income loss of US$119 million.

However, Chapek was bullish on the fate of the parks in a post-pandemic world. He said: “We’ve made a number of changes in how we manage and operate our theme parks and consumer products businesses in light of the disruptions caused by the pandemic. And we believe these and other adjustments we’ll continue to make will best position us to operate more effectively now and in a post-COVID environment.”

Overall, Disney’s quarterly revenue sat at US$16.25 billion, down from US$20.88 billion a year earlier but above analysts’ estimates of US$15.93 billion.

The CEO surmised the quarter: “While these remain challenging times, we are more confident than ever that we will emerge from this crisis in a strong position. We’re proud of all that we’ve accomplished, especially as it relates to our top priority our DTC business and we believe that the strategic actions we’re taking to transform our company will enable us to enhance the consumer and guest experience, grow and expand our businesses and increase shareholder value.”