Disney+ Jumps to 28.6M Subs, Topping Expectations

Hulu has 30.7M customers
Author:
Updated:
Original:

The Walt Disney Co. announced that its new Disney+ streaming service has 28.6 million subscribers.

Disney+ logo with brands

The day Disney+ launched on Nov. 12, Disney announced that it had exceeded 10 million subscribers.

At the end of the fourth quarter, Disney+ had 26.5 million subscribers. But on Disney's earnings call, CEO Bob Iger updated the figure to reflect paid signups through Monday.

Iger called the launch "enormously successful," adding that it "exceeding even our greatest expectations."

He said that conversions of free to pay subscribers and churn were better than the company predicted.

Iger also said season 2 of The Mandalorian will launch on Disney+ in October.

Disney has pivoted into the streaming business. In its fourth-quarter earnings report released Tuesday, it said that Hulu had 30.4 million subscribers--with 27.2 million subscribing to the SVOD service only and 3.2 million to the Hulu Plus Live TV service, and that ESPN+ has 6.6 million subscribers.

On the earnings call Iger said that as of Monday, ESPN+ had 7.6 million subscribers, helped by the recent Conor McGregor UFC fight, which brought in about a million pay-per-view purchases and a half-million new subscribers.

Hulu was up to 30.7 million subscribers as of Monday.

The average revenue per Disney+ subscriber was $5.56, the average ESPN+ subscriber generated $4.44, the average Hulu SVOD subscriber generated $13.15 dollars (including ad revenues) and Hulu Plus Live TV subscribers generated $59.47.

Total revenues for Disney’s Direct-to-Consumer and International unit rose to $4 billion from $900 million a year ago. But the unit’s operating loss jumped to $693 million from $136 million a year ago.

Disney+ is being rolled out internationally, including several Western European markets in March and Indian on March 29. Iger said the expansion would continue into 2021 and would include Latin America.

Taking Hulu international probably won't happen till 2021, Iger said. "We feel we need to concentrate on those [Disney+] launches and the marketing and the creation of product for those and then come in with Hulu right after or soon after," he said.

For the quarter, Disney reported that its fiscal first quarter earnings were $2.133 billion, or $1.17 per share, down from $2.788 billion, or $1.84, per share a year ago. Adjusted earnings per share were $1.53, down 17% from $1.84 a year ago.

Revenues were up 36% to $20.858 billion. 

“We had a strong first quarter, highlighted by the launch of Disney+, which has exceeded even our greatest expectations,” said Iger. “Thanks to our incredible collection of brands, outstanding content from our creative engines and state-of-the-art technology, we believe our direct-to-consumer services, including Disney+, ESPN+ and Hulu, position us well for continued growth in today’s dynamic media environment.”

At Disney’s Media Networks business, operating income was up 23% to $1.6 billion as revenues rose 24% to $7.4 billion.

Cable networks registered a 16% increase in operating income to $862 million as revenues rose 20% to $4.766 billion with the consolidation of the 21st Century Fox businesses including FX and National Geographic.

ESPN’s operating income was down as advertising revenue fell 4.5% and costs for NFL football, college football and other sports rose. If you add in digital and addressable ad revenue, ESPN’s advertising business was about flat, Disney CFO Christine McCarthy said on the earnings call.Subscription revenue was up despite a 2% drop in subscribers.

So far during the second quarter, ESPN domestic ad revenues are up 2%, McCarthy said.

Operating income for Disney’s broadcast business was up 41% to $575 million. The company credited added program sales thanks to the addition of Fox studio shows, plus new accounting guidance. Revenues were up 34% to $2.595 billion.

Disney said its legacy broadcast operations were down, with owned stations having less political ad revenue and ad revenue at ABC down as well.

Income at A+E Networks was up because of lower programming costs and higher ad revenue.

The company has shut down its resort in Shanghai. The company said that if the part remains closed for two months during the second quarter, it would have a negative impact on earnings of $135 million. .

Related