Disney+ saw a significant slowdown in subscriber growth in the third quarter.
The latest results released by Walt Disney show that the streaming service ended September with 118.1 million paying customers. This was only around 2.1 million more than the total posted three months earlier and significantly less than the 10.2 million it was forecast to add. Although the 118.1 million total was 60% higher than the 73.7 million posted a year earlier, in Q2 the figure was over double the 57.5 million Disney+ had in the second quarter of 2020.
Speaking in a call accompanying the results, Walt Disney chief executive Bob Chapek said the company is “extremely pleased with the performance of our streaming services”, with the D2C portfolio having grown by 48% and Disney+ by 60% in the past year.
He went on to reiterate that, “We remain focused on managing our D2C business for the long term, not quarter to quarter, and we are confident we are at the right trajectory to achieve the guidance we provided at last year’s investment day, reaching between 230-260 million paid Disney+ subscribers by the end of fiscal year 2024 and with Disney+ achieving profitability that same year”.
Alongside Disney+, Walt Disney’s other streaming services ESPN+ (+66%) and Hulu (20%) ended the third quarter with 17.1 million and 43.8 million paying customers respectively. In the case if Hulu, SVOD only accounted for 39.7 million (+22%) and live TV and VOD 4 million (-2%) of the total.
Walt Disney notes that D2C consumer revenues for the quarter increased by 38% to $4.6 billion and operating loss from $0.4 billion to $0.6 billion. This was due to higher losses at Disney+, due to higher programming and production, marketing and technology costs, partially offset by increases in subscription and Premier Access revenues. There were also losses, though to a lesser extent, at ESPN+, but partially offset by improved results at Hulu.
Disney+ ARPU fell by 9% to $4.12 in the year to September 30, due to a higher mix of Disney+ Hotstar subscribers in Q3 than a year earlier.
