Just over three years since its launch and subsequent meteoritic and seemingly unstoppable rise, the Disney+ direct-to-consumer service has seen its first reverse in the first quarter of its parent company’s fiscal 2023 which also saw tough times for its linear business.
For the three-month period ended 31 December 2022, The Walt Disney Company reported first quarter revenues of $23.512 billion up 8% on an annual basis, driving net income of $1,279 billion, a year-on-year rise of 11%.
Drilling deeper into its Media and Entertainment Distribution line, Disney reported that Linear Networks revenues for the quarter decreased 5% compared Q1 of fiscal 2022 to $7.3 billion, and operating income decreased 16% to $1.3 billion. US Channels revenues for the quarter decreased by 1% to $6.1 billion though operating income increased 5% to $928 million. The increase in operating income was attributed to higher results at Cable, while results at Broadcasting were comparable to the quarter a year ago.
Yet perhaps the greatest interest was in the company’s Direct-to-Consumer business where revenues for the quarter increased 13% annually to $5.3 billion even though operating loss increased $0.5 billion to $1.1 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 the ESPN+ sports service.
Results at Disney+ were said to reflect higher programming and production costs and increased technology costs, partially offset by higher subscription revenue and a decrease in marketing costs. The increase in programming and production costs was attributable to more content provided on the service and higher average costs per hour, which included an increased mix of original content. Higher subscription revenue was mainly due to subscriber growth.
In terms of customers, Disney+ saw overall subscribers fall 1% annually to 161.8 million, with the Disney+ Hotstar line dropping 6% by itself, while Hulu waws up 2% to 48 million. ESPN+ subs grew by the same amount to 24.9 million.
Drilling deeper into its Media and Entertainment Distribution line, Disney reported that Linear Networks revenues for the quarter decreased 5% compared Q1 of fiscal 2022 to $7.3 billion, and operating income decreased 16% to $1.3 billion. US Channels revenues for the quarter decreased by 1% to $6.1 billion though operating income increased 5% to $928 million. The increase in operating income was attributed to higher results at Cable, while results at Broadcasting were comparable to the quarter a year ago.
Yet perhaps the greatest interest was in the company’s Direct-to-Consumer business where revenues for the quarter increased 13% annually to $5.3 billion even though operating loss increased $0.5 billion to $1.1 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 the ESPN+ sports service.
Results at Disney+ were said to reflect higher programming and production costs and increased technology costs, partially offset by higher subscription revenue and a decrease in marketing costs. The increase in programming and production costs was attributable to more content provided on the service and higher average costs per hour, which included an increased mix of original content. Higher subscription revenue was mainly due to subscriber growth.
In terms of customers, Disney+ saw overall subscribers fall 1% annually to 161.8 million, with the Disney+ Hotstar line dropping 6% by itself, while Hulu waws up 2% to 48 million. ESPN+ subs grew by the same amount to 24.9 million.
