Just before it celebrates a second century in 2023, The Walt Disney Company has described its 2022 financial year as one showing outstanding subscriber growth at direct-to-consumer services, adding nearly 57 million subscriptions for a total of more than 235 million.
And in the company’s fourth quarter ended 1 October 2022, the House of Mouse saw particular strong subscription growth with the addition of 14.6 million total subscriptions, including 12.1 million subscribers for the flagship Disney+ SVOD service. However, despite the impressive growth in subs, the quarter ended with such services seeing downturns in both revenue and profits.
Indeed, the annual results showed overall lower operating income at Disney Media and Entertainment Distribution as a whole, the decrease due to lower operating results at Direct-to-Consumer and Content Sales/ Licensing, partially offset by growth at Linear Networks. Growth at Linear Networks reflected higher US Broadcasting and Cable results, partially offset by lower results internationally. Linear Networks revenues for the quarter decreased 5% annually to $6.3 billion while and operating income increased 6% to $1.7 billion.
The decrease at Direct-to-Consumer was due to higher losses at Disney+ and, to a lesser extent, lower results for the Hulu OTT line and higher losses at sports offering ESPN+.
Direct-to-Consumer revenues for the quarter increased 8% compared with the same period in 2021 to $4.9 billion and operating loss increased $0.8 billion to $1.5 billion. The increase in operating loss was due to a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved results at ESPN+.
Results at Disney+ reflected higher programming and production costs, increases in marketing and technology costs and the absence of Premier Access releases in the current quarter, partially offset by higher subscription revenue. In the current quarter, there were no Premier Access releases whereas the prior-year quarter reflected the releases of Black Widow and Jungle Cruise. The increase in programming and production costs was driven by more content provided on the service and higher average costs, which included an increased mix of original content. Higher subscription revenue was due to subscriber growth and, to a lesser extent, increases in retail pricing, partially offset by an unfavourable foreign exchange impact.
In terms of subscribers, Disney+ saw an annual growth of 39% to total 164.2 million, 46.4 million of which were from the core US/Canada region, increasing 20%. International subs excluding Disney+ Hotstar grew 57% to 56.5 million which Disney+ Hotstar itself witnessed 42% growth to 61.3 million.
Commenting on the yearly Walt Disney Company results CEO Bob Chapek said: “The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally, and we expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate,” “By realigning our costs and realising the benefits of price increases and our Disney+ ad-supported tier coming 8 December , we believe we will be on the path to achieve a profitable streaming business that will drive continued growth and generate shareholder value long into the future. I am filled with optimism that this iconic company’s best days still lie ahead.”
Indeed, the annual results showed overall lower operating income at Disney Media and Entertainment Distribution as a whole, the decrease due to lower operating results at Direct-to-Consumer and Content Sales/ Licensing, partially offset by growth at Linear Networks. Growth at Linear Networks reflected higher US Broadcasting and Cable results, partially offset by lower results internationally. Linear Networks revenues for the quarter decreased 5% annually to $6.3 billion while and operating income increased 6% to $1.7 billion.
The decrease at Direct-to-Consumer was due to higher losses at Disney+ and, to a lesser extent, lower results for the Hulu OTT line and higher losses at sports offering ESPN+.
Direct-to-Consumer revenues for the quarter increased 8% compared with the same period in 2021 to $4.9 billion and operating loss increased $0.8 billion to $1.5 billion. The increase in operating loss was due to a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved results at ESPN+.
Results at Disney+ reflected higher programming and production costs, increases in marketing and technology costs and the absence of Premier Access releases in the current quarter, partially offset by higher subscription revenue. In the current quarter, there were no Premier Access releases whereas the prior-year quarter reflected the releases of Black Widow and Jungle Cruise. The increase in programming and production costs was driven by more content provided on the service and higher average costs, which included an increased mix of original content. Higher subscription revenue was due to subscriber growth and, to a lesser extent, increases in retail pricing, partially offset by an unfavourable foreign exchange impact.
In terms of subscribers, Disney+ saw an annual growth of 39% to total 164.2 million, 46.4 million of which were from the core US/Canada region, increasing 20%. International subs excluding Disney+ Hotstar grew 57% to 56.5 million which Disney+ Hotstar itself witnessed 42% growth to 61.3 million.
Commenting on the yearly Walt Disney Company results CEO Bob Chapek said: “The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally, and we expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate,” “By realigning our costs and realising the benefits of price increases and our Disney+ ad-supported tier coming 8 December , we believe we will be on the path to achieve a profitable streaming business that will drive continued growth and generate shareholder value long into the future. I am filled with optimism that this iconic company’s best days still lie ahead.”
