US Disney+ subs stall as ad-supported offer to launch on 8 December | Major Businesses | Business | News | Rapid TV News
By continuing to use this site you consent to the use of cookies on your device as described in our privacy policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. [Close]
Even as it described the three-month period as excellent overall, with “significant” subscriber growth in its streaming services, the direct-to-consumer business of the Walt Disney Company has shown in the third quarter of its current fiscal year signs of growth halting in key commercial regions.
Disney Multi Brand 12Feb2021
And as it was reporting the Q3 results, the company officially announced the launch in December 2022 of a number of ad-supported options for its Disney+, Hulu and ESPN+ services.

For the quarter ended 2 July 2022, The Walt Disney company reported revenues of $21.504 billion, up 26% on a yearly basis, with a total of $62.572 billion for the nine months of the fiscal year, an annual rise of 28%. Total segment operating income for the quarter was $3.567 billion, soaring 50% compared with a year ago, and net income from continuing operations for the quarter was $1.409 billion, climbing 53%.

More modest growth was seen at the Disney Media and Entertainment Distribution business line where revenues for the quarter totalled $14.11 billion, up 11% annually. In this division, revenues from Linear Networks revenues for the quarter increased 3% to $7.2 billion, and operating income increased 13% to $2.5 billion. (US) Domestic Channels revenues for the quarter increased 2% to $5.7 billion, and operating income increased 15% compared with Q3 2021 to $2.1 billion, reflecting higher results at both Cable and Broadcasting. (Non-US) International Channels revenues for the quarter increased 7% to $1.5 billion and operating income was comparable to the prior-year quarter at $0.2 billion reflecting lower operating income from channels that operated for the entire current and prior-year quarters (ongoing channels), offset by a benefit from channel closures.

Yet as ever the focus for the company was at Direct-to-Consumer. Financially, the segment reported revenues for the quarter increased 19% to $5.1 billion and operating loss increased $0.8 billion to $1.1 billion. The increase in operating loss was due to a higher loss at Disney+, lower operating income at Hulu and, to a lesser extent, a higher loss at ESPN+.

Lower results at Disney+ were said to have reflected higher programming and production, technology and marketing costs, partially offset by increases in subscription revenue and, to a lesser extent, advertising revenue.

In terms of subs, Disney+ ended the quarter with 152.1 million customers, of which 58.4 million were accounted for by Disney+ Hotstar, 49.2 million from non-US and Canada excluding Disney+ Hotstar and 44.5 million from business in the US and Canada. Total annual subs growth was 31%, with Disney+ Hotstar up 30%, non-US and Canada excluding Disney+ Hotstar increasing 48% and US and Canada seeing an increase of 17%.

ESPN+ business grew 53% to end up with 22.8 million customers and total Hulu subscribers at the end of Q3 amounted to 46.2 million, inching up 8% on a yearly basis for both the SVOD only and live TV plus SVOD options.

Commenting on the third quarter results, The Walt Disney Company Chief Executive Officer Bob Chapek said: “With 14.4 million Disney+ subscribers added in the fiscal third quarter, we now have 221 million total subscriptions across our streaming offerings. We continue to transform entertainment as we near our second century, with compelling new storytelling across our many platforms and unique immersive physical experiences that exceed guest expectations, all of which are reflected in our strong operating results this quarter.”

The new ad-supported offers will see Disney+ available at $7.99 per month with ads and $10.99 without; ESPN+ with ads for $9.99 per month; Hulu with ads for $7.99 per month and without for $14.99.

“With our new ad-supported Disney+ offering and an expanded lineup of plans across our entire streaming portfolio, we will be providing greater consumer choice at a variety of price points to cater to the diverse needs of our viewers and appeal to an even broader audience,” said Kareem Daniel, Chairman, Disney Media & Entertainment Distribution. “Disney+, Hulu, and ESPN+ feature unparalleled content and viewing experiences and offer the best value in streaming today, with over 100,000 movie titles, TV episodes, original shows, sports, and live events collectively.”