Thursday, July 7, 2022

Disney Plus added nearly 8 million new subscribers as Netflix struggles

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Disney has added 7.9 million new subscribers to its Disney Plus streaming service in the first three months of 2022, the company announced in its… Q2 earnings report on Wednesday† That brings the total to approximately 87.6 million worldwide, excluding the 50.1 million people who subscribe to Disney Plus Hotstar internationally. In the US and Canada alone, Disney Plus now has 7.1 million more subscribers than a year ago, at 44.4 million.

The company also said that subscribers for all of its streaming offerings — including Hulu and ESPN Plus — had grown to more than 205 million, up from 196.4 million. it reported in January

That’s better news than Netflix recently had. Last month, the streaming company reported it had lost 200,000 subscribers compared to the previous quarter, its first dip in more than a decade. It’s also growing faster than HBO and HBO Max, which reported 3 million new subscribers last quarter (at about 77 million total customers, HBO is still very much behind Disney). It’s also worth noting that Netflix still has about 222 million subscribers.

Of course, all of these companies outperform CNN Plus, which launched and folded in a matter of weeks.

Disney also reports that it earns more per Disney Plus subscriber than before, at least in the US. Where the average monthly revenue per paid subscriber was $6.01, it is now at $6.32. Disney says this is due to “an increase in retail prices and a lower mix of wholesale subscribers.”

Despite this, Disney Plus is actually losing company money at a bigger clip than before. Disney says this is due to higher production, advertising and technology costs. It seems unlikely that those costs will come down, and raising prices, as Netflix did, could cut subscriber growth. All that together makes it clear why Disney wants to create an ad-supported layer sooner rather than later.

One last interesting note comes at the very top of Disney’s earnings. The company notes that the revenue growth came despite it giving up a billion dollars in revenue to early end a customer’s movie and television content licensing agreement to use the content on its own streaming services. The report doesn’t specify which of Disney’s customers this deal was with, but the company was very clearly willing to take a big hit to something on Disney Plus. Variety and The Hollywood Reporter speculated that this could be about the Marvel shows that were on Netflix — before abruptly moving to Disney Plus in March.

Disney did not immediately respond The edge‘s request for details on the deal.

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