The Walt Disney Co. said its streaming business increased to 196.4 million subscribers in its fiscal first quarter, up from 179 million last quarter, and that Disney Plus added 11.8 million subscribers.
The numbers beat expectations on Wall Street, which had forecast an increase of about 7 million Disney Plus subscribers. Disney also topped the Wall Street consensus for revenue and earnings.
With the strong growth, Disney is closing the gap with streaming leader Netflix, which reported having 222 million subscribers following a fourth quarter in which growth disappointed investors, leading to a deep dive for Netflix stock.
Disney stock, which rose more than 3% on Wednesday to $147.23 a share, jumped another 7% in after-hours trading following the earnings report.
Disney Plus had 129.8 million subscribers as of January 1, up from 94.9 million a year ago and 118.1 million last quarter. In the U.S. and Canada, Disney Plus had 42.9 million subscribers, up from 36.3 million a year ago.
ESPN Plus had 21.3 million subscribers, up from 12.1 million and 17 million last quarter.
Hulu had 45.3 million subscribers, up from 39.4 million a year ago and 43.8 million subscribers last quarter. SVOD-only Hulu subscribers rose to 40.9 million from 35.4 million a year ago and 39.7 million last quarter and subscribers to Hulu Plus Live TV was 4.3 million, up from 4 million a year ago and 4 million last quarter.
Disney’s direct-to-consumer business lost $593 million, compared to a $466 million loss a year ago. Revenue rose 34% to $4.7 billion. The company said Disney Plus had higher programming and production, marketing and technology costs, partly offset by an increase in subscription revenue. ESPN Plus results were also lower because higher sports programming costs, offset by subscription growth and higher income from UFC pay-per view events.
Operating income for the Disney Media and Entertainment Distribution segment fell 44% to $808 million.
Revenue for the media and entertainment distribution segment rose 15% to $14.6 billion.
Hulu income rose due to higher subscription revenue growth because of a price increase.
Operating income for Disney’s linear networks fell 13% to $1.5 billion. Revenue was flat at $7.7 billion. Operating income at the domestic linear channels was down 21% to $888 million as revenue rose 1% to $6.2 billion. ABC ad revenue was comparable to last year, the company said. Ad revenue was down at the station group compared to last year’s election season.
Overall, Disney’s first-quarter net income jumped to $1.1 billion, or 60 cents a share, from $17 million, or 1 cent a share a year ago.
Revenue rose 34% to $21.8 billion.
“We’ve had a very strong start to the fiscal year, with a significant rise in earnings per share, record revenue and operating income at our domestic parks and resorts, the launch of a new franchise with Encanto, and a significant increase in total subscriptions across our streaming portfolio to 196.4 million, including 11.8 million Disney Plus subscribers added in the first quarter,” said CEO Bob Chapek.
“This marks the final year of The Walt Disney Company’s first century, and performance like this coupled with our unmatched collection of assets and platforms, creative capabilities, and unique place in the culture give me great confidence we will continue to define entertainment for the next 100 years.” ■
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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