Disney is surpassing Netflix in total subscribers across its platforms, but its streaming division is making a loss.
Disney is continuing to surpass Netflix in subscriber numbers, through the combination of its Disney+, Hulu and ESPN+ streaming services.
In its earnings report for its fourth fiscal quarter, the company said the total number of people paying for its three direct-to-consumer streaming services now stands at more than 235m.
This marks substantial growth from its previous quarter, when Disney reached 221m total subscribers and edged ahead of Netflix for the first time.
Netflix brought in 2.4m new subscribers in its most recent quarter, announcing last month that its subscriber count had reached 223.1m.
Disney’s flagship streaming platform Disney+ has reached 164.2m subscribers, an increase of 12m since last quarter. Hulu reached more than 47m subscribers, with growth of only 1m, while ESPN+ hit 24.3m subscribers.
Disney CEO Bob Chapek said the rapid growth of Disney+ is due to the “strategic decision to invest heavily” in creating content and rolling out the service internationally.
“2022 was a strong year for Disney, with some of our best storytelling yet, record results at our parks, experiences and products segment, and outstanding subscriber growth at our direct-to-consumer services,” Chapek added.
Despite the rise in subscriber numbers, the investment by Disney to compete in the streaming market is impacting the bottom line.
Disney’s fourth-quarter revenue grew by 9pc year-on-year to reach $20.15bn, but this fell short of Refinitiv expectations of more than $21bn. The company’s direct-to-consumer division streaming division lost $1.47bn in the last quarter, which is more than double the loss a year ago.
Chapek said the company expects the direct-to-consumer losses to “narrow going forward” and that Disney+ will achieve profitability in fiscal 2024 “assuming we do not see a meaningful shift in the economic climate”.
“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,” Chapek said.
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