Disney’s total subscriber numbers surpass Netflix’s for first time as price hike looms

Subscriber numbers to Disney’s streaming platforms have overtaken Netflix’s for the first time as Disney+ prepares to raise prices and launch an AVoD tier later this year.

Bob Chapek

Disney said it added 14.4 million subscribers to Disney+ in its fiscal third quarter, taking the total number of subscriptions across its three streaming offerings – Disney+, Hulu and ESPN+ – to 221 million. Netflix had 220.7 million subscribers as of July, after losing almost one million subs in its second quarter.

Individually, Disney+, including Disney+ Hotstar in India, now has 152 million subscribers, beating analysts’ predictions, while Hulu has 46.2 million and ESPN+ has 22.8 million.

Despite the subscriber growth, Disney lowered its longer-term subscription forecast for Disney+ to between 215 million and 245 million subscribers, down from its previous guidance of 230 million to 260 million by the end of the 2024 financial year. The company said it was lowering its forecast after Disney+ Hotstar lost the rights to Indian Premier League cricket to Viacom18 in a keenly contested battle that eventually cost US$3bn.

Revenue in the third quarter for the Disney Media & Entertainment Distribution division grew by 11% year-on-year to US$14.1bn, while revenue in the first nine months of Disney’s financial year was up 12% to US$42.3bn.

Within this, revenue from linear networks increased by 3% to US$7.2bn in Q3 and by 3% to US$22bn in the nine-month period. Direct-to-consumer (D2C) revenue rose by 19% in Q3 to US$5.1bn and by 25% in the nine months to US$14.7bn.

The D2C operating loss, however, widened to US$1.1bn in Q3, from US$800m the prior quarter, which Disney said was a result of higher programming, production, technology and marketing costs at Disney+, Hulu and ESPN+. It reaffirmed, however, that Disney+ will become profitable by the end of the 2024 financial year.

Elsewhere, the Mouse House revealed it will launch Disney+’s AVoD tier in the US on December 8. However, the ad-supported offering will be priced at US$7.99 per month, which is what the ad-free tier currently costs. In line with this, the ad-free offering will go up to US$10.99 per month.

Hulu is also raising its prices, with the ad-supported tier rising from $6.99 to US$7.99 per month on October 10 and the ad-free offering increasing from US$12.99 to US$14.99.

Disney CEO Bob Chapek said: “We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live sports viewership and significant subscriber growth at our streaming services. With 14.4 million Disney+ subscribers added in the fiscal third quarter, we now have 221 million total subscriptions across our streaming offerings.

“We continue to transform entertainment as we near our second century, with compelling new storytelling across our many platforms and unique immersive physical experiences that exceed guest expectations, all of which are reflected in our strong operating results this quarter.”