Disney+ adds 12.1m subs as Chapek promises profit by 2024 despite losses

Disney+ added 12.1 million subscribers in the fourth quarter, beating Wall Street expectations to reach a total of 164.2 million.

Bob Chapek

Overall, Disney added 14.6 million Disney+, ESPN+ and Hulu subscribers to hit 235.7 million across its entire streaming portfolio globally.

While its subs gains were impressive, Disney’s direct-to-consumer (D2C) losses widened to US$1.47bn in the fourth quarter, up from US$1.1bn in Q3.

Executives reiterated their projection that Disney+ would be profitable by fiscal 2024, with CEO Bob Chapek saying losses will continue to lessen until the company’s D2C segment ultimately turns a profit by the fourth quarter of 2024.

In the US and Canada, Disney+ added around 2.1 million subscribers in the quarter, while 7.2 million came from international markets and 2.9 million from its Disney+ Hotstar service in India. Excluding Disney+ Hotstar, Disney+ now has 102.9 million subscribers globally.

D2C revenue was US$4.9bn in the fourth quarter, up 8% from the previous year, and linear networks revenue fell by 5% to US$6.3bn.

While Disney’s D2C subscriber additions were ahead of Wall Street’s expectations, total revenue fell short. Overall, the company’s quarterly revenue was US$20.1bn, compared with the US$21.2bn expected, with operating income of US$1.6bn.

“The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally, and we expect our DTC operating losses to narrow and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate,” said Chapek.

“By realigning our costs and realising the benefits of price increases and our Disney+ ad-supported tier coming December 8, we believe we will be on the path to achieve a profitable streaming business that will drive continued growth and generate shareholder value long into the future. And as we embark on Disney’s second century in 2023, I am filled with optimism that this iconic company’s best days still lie ahead.”