Disney+ hits 95MN subs as Disney reveals tough Q1 | Major Businesses | Business | News | Rapid TV News
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Boosted considerably by aggressive marketing in Asia, the Disney+ direct-to-consumer (DTC) service was the unchallenged stand out in a challenging first quarter for the Walt Disney Company as it battled to mitigate the ongoing impact of the Covid-19 pandemic.
Disney Multi Brand 12Feb2021
For the first quarter ended 2 January 2021, the Walt Disney Company reported total revenues of $16.249 billion, down 22% on an annual basis. Income from continuing operations before taxes plummeted 98% annually to $46 million, with total segment operating income plunging 67% compared with the previous Q1 to $1.332 billion.

Noting the performance, Disney stressed that results in the quarter were adversely impacted by Covid-19 with the most significant hit felt at Disney Parks, Experiences and Products segment where since late in the second quarter of fiscal 2020, parks and resorts have been closed or operating at significantly reduced capacity and cruise ship sailings suspended. The company also experienced continued disruptions in production and availability of content, including the cancellation or shift of key live sports programming from fiscal 2020 into fiscal 2021, as well as the suspension of production of most film and television content.

Naturally, the company was keener to note what it called the “incredible strides” made in the DTC business, which reached more than 146 million total paid subscriptions across streaming services at the end of the quarter. DTC revenues for the quarter increased 73% to $3.5 billion and operating loss decreased from $1.1 billion to $466 million, the latter due mainly to improved results at Hulu, and to a lesser extent, at Disney+ and ESPN+. The increase at Hulu was due to subscriber growth and increased advertising revenues driven by higher impressions, partially offset by an increase in programming and production costs due to higher subscriber-based fees for programming the live television service.

However, the star of the show, as has been the case since the service’s launch in November 2019, was Disney+ which at the end of Q1 was found to have racked up 94.9 million subscribers. This compared with 26.5 million at the same period a year ago. The revenue improvement at Disney+ was driven by an increase in subscribers, partially offset by higher programming and production cost amortisation and increased marketing and technology costs. The increases in subscribers and costs reflected the ongoing expansion of Disney+ including launching in additional markets. Indeed, the results noted that the average monthly revenue per paid subscriber for Disney+ decreased from $5.56 to $4.03 due to the heavily discounted launch of Disney+ Hotstar in Asia.

ESPN+ grew its subscribers 83% on an annual basis but the associated revenue surge was partially offset by higher sports programming costs. The Hulu over-the-top service showed 30% overall growth to total 39.4 million paying customers. The SVOD only option contributed 35.4 million of these, up 30% annually also, while the $75+ Live TV + SVOD option grew 25% over the year to have 4 million customers.

The Disney fourth quarter results also revealed that revenues for the Linear Networks business increased 2% to $7.7 billion, and operating income decreased 4% to $1.7 billion. US channels revenues for the quarter increased 1% to $6.1 billion and operating income decreased 7% to $1.1 billion. The decrease in operating income was due to lower results at the cable business, partially offset by an increase at broadcasting.