Disney Plus adds 8 million subscribers, but it’s still running at a loss


Disney+

Disney+
Photo: NICK AGRO/AFP via Getty Images

When Disney first launched its Disney+ streaming service in November 2019, it did so with a long-term mindset. Streaming was, presumably, the future, and so the company was willing to spend a lot of money to catch up with the more established artists in the industry, including Netflix, the biggest of the big kids on the block. After all: no one in the industry has money to burn like Disney.

Fast forward to this week, and the reveal that Disney+ won a notable victory over his biggest rival, with The edge reports that Disney+ added nearly 8 million new subscribers in the last quarter, a period that saw Netflix loses paid users – and with them a good part of its stock price.

It is through the exit of Disney’s Last quarterly tax return, always a great day for anyone who wants to hear companies give the happiest possible analysis of their own financial fortunes. Cue Disney’s new CEO, Bob Chapek, who also sang that, taken together, all of Disney’s streaming services now have a total of 205 million subscribers. Which seems like a lot, until you remember that Netflix – poor and humiliated Netflix – has somewhere in the neighborhood of 222 million, which, even with recent dsips, are consolidated into one service, instead of being split between Disney+, Hulu and ESPN.

Digging into the report, we learn that Disney+ itself, including domestic and international subscribers, and users of Hotstar (which operates from India and streams Disney+ content in a number of South Asian countries -Is where the regular service does not work)—totals 137.7 million subscribers. In the United States and Canada, that number is only 44.4 million, still 30 million less than what Netflix sports domestically. Which is mostly just a reminder that what investors really like is not raw numbers, but growth (and managed expectations); despite drag, Disney has added subscribers over the past yearwhile Netflix lost some, so this can easily be turned into a win for the mouse.

Likewise, the company continues to seem largely indifferent to the fact that its digital offerings not only operate at a loss, but at a increasing a; although revenue increased for the quarter, expenses still increased, meaning Disney lost $0.9 billion in streaming over the past three months (compared to $0.6 billion in the prior quarter). As we said before, the company has always been in place before how expensive it would be to get into streaming, but it’s a sobering reminder that even Disney can’t make money from nothing. Among other things, the company would have had to eat a billion dollar loss in penalties paid because he made a deal with a client to license his content, presumably so he could pass that material on to Disney+ instead.

The result of all this is that victories in the world of streaming are often as much about optics as numbers.; Disney can happily swallow losses like this because it can, well, literally afford. Even so, the company is apparently pushing for an ad-supported level of streaming (which will simultaneously increase subscriber counts. and get him some upfront ad revenue) soon to be rolled out for the streaming service.


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