Disney+ added 7.9 million subscribers in its most recent quarter, for a total of 138 million worldwide, the company announced Wednesday, helping to avoid the streaming slowdown that has lately sent Netflix’s stock price plummeting.
Like most media companies, Disney’s stock has plummeted following Netflix’s announcement last month that it had lost 200,000 subscribers in the first three months of the year and was expected to lose another two million this quarter. After years of applauding media companies for losing billions from streaming, investors are now pushing to find a path to profitability.
The release of movies like Pixar’s “Turning Red” helped Disney+ attract subscribers in its first quarter, which ended April 2.
Disney’s results are some good news for chief executive Bob Chapek, who has faced a public relations crisis as a result of the company’s response to Florida school legislation that, among other things, has sparked classroom discussions. on sexual orientation and gender identity. (Disney is the state’s largest private employer.)
The company initially abstained from publicly pronouncing the bill, but bounced back after an internal uprising. Mr. Chapek went on to denounce the legislation, provoking the ire of conservatives, including Florida Governor Ron DeSantis. Last month, Republican Florida lawmakers repealed a 1967 law that allowed Walt Disney World to function as its own quasi-government. In the wake of the upheaval, Geoff Morrell, who joined Disney in January as top executive for government relations and communications, resigned last month.
Disney revenue rose 23 percent year-on-year to $19.2 billion, but fell short of analyst expectations. Disney said it was hit by a decision to pull back some of its content from other distributors in favor of its own channels, which meant a $1 billion reduction in license revenue as part of a trade-off to buy its own. direct-to-consumer business.
Disney reported earnings per share of $1.08, falling short of analyst expectations of $1.17.
Disney’s theme parks unit came roaring back from a year ago when the Covid-19 pandemic hampered personal attendance. Sales in the division doubled compared to the same period last year, with a new line-skipping system driving increases.
While streaming services are looking for more subscribers, India is becoming an important market. Deep-pocketed media companies are preparing to bid for rights to screen popular Indian Premier League cricket matches. Disney currently has the rights to stream the games on its Hotstar service, which it acquired in its 2019 mega deal with 21st Century Fox. Losing those rights can be a blow. However, Mr. Chapek has said that Disney can achieve its subscriber goals even if it doesn’t retain those rights.
During a telephone conversation following the announcement of the profit, Mr. Chapek said Disney would eventually become more aggressive in moving major live sports to the ESPN+ streaming service. The money generated by ESPN cable channels’ lucrative portfolio makes that unsustainable at the moment, so the company is taking a measured approach to sports streaming, Mr Chapek said.
“What we do is put one foot on the wharf if you like, and one foot on the boat,” said Mr. Chapek.
Mr. Chapek also responded to an analyst question about the lack of new Disney movies opening in the Chinese theater market, where the company has had an uneven record in recent years. Mr. Chapek said Disney movies performed well without help from moviegoers in China, pointing to the success of “Doctor Strange in the Multiverse of Madness”.
“We’re pretty sure that even without China – if we continue to have trouble getting titles in there – that doesn’t really rule out our success,” said Mr. Chapek.
