Disney profit jumps 50%, and streaming subscribers surpass Netflix

Disney+ added 14.4 million subscribers in the most recent quarter. PHOTO: AFP

LOS ANGELES (NYT) - Bucking a streaming slowdown that has recently bedeviled Hollywood, Disney+ added 14.4 million subscribers in the most recent quarter, about 45 per cent more than Wall Street had expected and lifting Disney's portfolio of streaming services to 221 million subscribers worldwide, edging ahead of Netflix for the first time.

As expected, however, Disney acknowledged on Wednesday (Aug 10) that its quest to attract 230 million to 260 million subscribers with Disney+ alone by 2024 would be hampered by the loss of streaming rights to popular cricket matches in India.

The company's new subscriber guidance is 215 million to 245 million by 2024, with India almost entirely accounting for the decrease.

Disney reaffirmed its promise that Disney+ will be profitable by that year.

Disney released the figures on Wednesday as part of a blockbuster quarterly earnings report.

The company also announced price increases for Disney+, Hulu and ESPN+, as well as details of a new version of Disney+ that will include advertising.

Starting on Dec 8, the current ad-free version of Disney+ will cost $11 a month, up from $8. The ad-supported option will cost US$8. (Netflix charges US$15.49 for a standard subscription.)

"We are taking a thoughtful approach by launching with a lower ad load and frequency to ensure a great experience for viewers," Disney chief executive Bob Chapek told analysts on an earnings-related conference call on Wednesday.

Disney's board recently renewed Mr Chapek's contract until 2025.

Strong demand for theme-park vacations - despite economists' worries about an inflation-led downturn in consumer spending - powered Disney's increase in profitability.

Revenue totalled US$21.5 billion (S$29.4 billion), a 26 per cent increase from a year earlier. Operating profit surged 50 per cent, to US$3.6 billion.

Analysts had been expecting revenue of about US$21 billion and profit of about US$3.2 billion, according to FactSet.

Disney's quarterly results stood in contrast to those of competing media companies, with Comcast disappointing investors with a stagnant Peacock streaming service, and shares of Warner Bros Discovery plunging because of lower profit guidance.

Netflix also had a lackluster quarter; last month, it reported 220.7 million subscribers, a loss of nearly 1 million.

"Disney still faces economic uncertainty and intense competition," Mr Paul Verna, principal analyst at Insider Intelligence, a research firm, said in an e-mail, "but its quarterly performance should at least temporarily put to rest some of Wall Street's gloomier perceptions about the company and, more broadly, about the entertainment industry."

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