Streamy

Disney+ crushes subscriber-growth expectations, suggesting that not all streamers are created equal

Thursday, August 11, 2022 by Robinhood Snacks |
Sweet streams (Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Sweet streams (Rafael Henrique/SOPA Images/LightRocket via Getty Images)

It’s the Mickey Mouse Clubhouse… but the celebration’s happening in Mickey’s boardroom. Disney shares popped 7% after it reported expectation-beating sales and profit. Quarterly revenue at the House of Mouse surged 26%, fueled by theme parks and surprisingly strong streaming growth.

  • Parks and experiences revenue surged 70% from last year, hitting a record $7.4B. Profit 6X’d as consumers flocked back to Disney parks, cruises, and resorts (#BrunchWithBelle).
  • Streaming crushed: Disney+ added 14.4M subscribers (beating expectations of 10M), for a total of 152M. Most new subs came from outside North America.
  • The streaming #s are a validating sign for CEO Bob Chapek’s goal of hitting between 230M and 260M Disney+ subscribers and achieving streaming profitability by September 2024.

All eyes on streaming… Investors were eagerly awaiting Disney+ subscriber numbers for indicators on the streaming industry’s growth prospects. Mid-pandemic, streaming’s future looked brighter than Tinker Bell’s wings. Now it’s iffy:

  • The downside: Netflix lost 1M subs last quarter and expects to add just 1M this quarter — a major slowdown and a foreboding sign for streamers.
  • The meh side: Comcast had no subscriber gains for Peacock last quarter, and Warner Bros.’ HBO Max and Discovery+ gained just 1.7M subs combined.
  • The upside: Disney’s big gains. Also: Paramount+ added a relatively strong 3.7M subs.
THE TAKEAWAY

Netflix is no longer the benchmark… for the entire streaming industry. Disney’s #s showed this was a mixed quarter for streamers — read: it’s not all gloom and doom in the streamer-verse. Less than three years after launching, Disney+ is just 70M subs away from catching up to Netflix. But Disney’s streamers (Disney+, Hulu, ESPN+) are still losing billions as it splurges on original content, and now it’s raising prices to curb losses. TBD if that’ll hurt its ambitious goals.