Disney+ Rockets Toward 100 Million Subscribers After Just 14 Months

As new streamers race to scale up, Disney+’s subscriber count just keeps on getting bigger. At the start of 2021, the service had 94.9 million subscribers, the company said during its quarterly earnings report today. The updated subscriber numbers mark a more than 8 million jump in just a month’s time—late last year, Disney said that as of Dec. 2, the streamer had cleared 86.8 million subscribers—and more than doubled its base from a year ago, when the service was just two months old. Disney’s other subscription services are also growing, although their scale is still dwarfed by Disney+’s staggering growth. Hulu had 39.4 million subscribers as of Jan. 2, a 30% jump from a year ago, while ESPN+ had 12.1 million subscribers, a 83% increase from the same time frame. In all, the company had 146 million total paid subscriptions across our streaming services at the end of the quarter, ahead of a planned international expansion later this month. “Disney+ has exceeded even our highest expectations,” Disney CEO Bob Chapek told investors in a call Thursday, echoing his past comments about the streamer’s lightspeed growth. “The wealth of IP from our unrivaled collection of brands and franchises provides us with an incredible breadth and depth of storylines and characters to mine for Disney+ and our other streaming services.” Those figures don’t include any possible bump around the premiere of Disney+'s high-profile Marvel original WandaVision, which debuted on Jan. 15, but it may reflect some early subscriber surges around Pixar original film Soul, which the company sent straight to streaming on Dec. 25. Late last month, Nielsen reported that viewers spent nearly 1.67 billion minutes watching the film in the first two days it was available. “We were absolutely thrilled by what that brought to our business, in terms of both acquisition and retention,” Chapek said of the film. “It was a big hit with our subscriber base.” There’s a big caveat to Disney+’s growth, though: The company’s average revenue per user (ARPU) for its biggest streamer is trending down. The service counted an average of $4.03 revenue per subscriber at the end of the quarter, down nearly a third from the average $5.56 that the company counted a year ago. That’s primarily because of the chunk of international subscribers who get Disney+ as part of Disney+ Hotstar, the company’s Indian subscription video service. About 30% of Disney+’s international subscriber base comes through Hotstar, Disney senior evp and chief financial officer Christine McCarthy said, and ARPU would go up to $5.37 per user if Disney+ Hotstar subscriptions were excluded from the calculation. Meanwhile, ESPN+, Hulu’s subscription-only tier and Hulu’s subscription and live TV tier all notched modest average monthly revenue per subscriber gains. Hulu’s live TV and subscription tier, which raised its prices in December, brings in average monthly revenue of more than $75 from its 4 million customers, while Hulu’s subscription-only tier saw higher per-subscriber advertising revenue that helped ARPU tick up. Disney’s excellent streaming figures come ahead of a planned price hike for the service, which is slated for March 26. The price increase, which McCarthy said was “very reasonable,” will increase Disney+’s price to $7.99 per month, or $79.99 per year for an annual subscription. It will also increase the price of the Disney Bundle, which includes Disney+, Hulu and ESPN+, will also cost more. That bundle will now be priced at $13.99 per month. “The best insulation we’ve got [against churn] is to keep the price-value relationship very high,” Chapek said. “And there’s no better way to do it than powerhouse franchises cranking out regular new releases on a monthly basis.” Case in point: Marvel has two more original series slated to roll out in the next several months, with The Falcon and the Winter Soldier, which was advertised during the Super Bowl, to premiere next month. That price increase will go back its direct-to-consumer segment to capitalize on its streamers’ momentum and pay for more programming. While the company updated its projected subscriber figures by nearly threefold in December to factor in its astonishing growth, the company will not alter its projection that the segment will reach profitability by fiscal year 2024, McCarthy said. The update on Disney’s growing streaming business comes as other parts of the entertainment giant’s business continue to struggle under the pressures of the Covid-19 pandemic. Disney’s parks, experiences and products segment reported revenues for the quarter of $3.6 billion, down 53%. The company’s linear networks segment reported a 2% increase in revenue to $7.7 billion in the quarter as political advertising helped buoy the company’s domestic channels. Chapek said the pandemic has forced the company to be flexible, something that is evident in future theatrical release plans. After testing out several release options, including making the live-action version of Mulan available as a premium title for an additional price on Disney+, the company is forging ahead with various release models. Animated film Raya and the Last Dragon will debut as a premium title on March 5, the company previously said, and is keeping a close eye on options for future titles. One of those includes Black Widow, the Scarlett Johansson-led Marvel film that has had its release pushed back twice due to the pandemic’s effects on theater operations. While that film has been slated for a May 2021 theatrical release, Chapek acknowledged that other options may be on the table depending on market dynamics. “We are still intending it to be a theatrical release, but we are going to be watching very carefully the reopening of theaters and the consumer sentiment in terms of desire to go back to theaters and see whether that strategy needs to be revisited,” he said.