Disney Plus gains 8 million subscribers — but it’s still operating at a loss

Disney Plus gains 8 million subscribers — but it’s still operating at a loss

Disney+

Disney+
photo: NICK AGRO/AFP via Getty Images

When Disney first launched its Disney+ streaming service in November 2019, it did so with a long-term mindset. Streaming was presumably the future, and so the company was willing to burn a ton of cash to keep up with more established artists in the industry — most notably Netflix, the biggest of the big kids on the block. After all, nobody in the industry has as much money to burn as Disney.

Fast forward to this week and reveal that Disney+ has achieved a remarkable victory over his biggest rival, with The edge reporting that Disney+ added nearly 8 million new subscribers in the most recent quarter, a period that has seen Netflix is ​​losing paid users — and with them a tidy chunk of its stock price.

This is according to the publication of The latest from Disney quarterly earnings statement, always a great day for anyone who wants to hear how companies give the best possible analysis of their own financial fortunes. Cue New-ish Disney CEO Bob Chapek, who also crowed that all of Disney’s streaming services combined now have a total of 205 million subscribers. Which sounds like a lot, until you remember that Netflix — poor, humbled Netflix — has somewhere near 222 millions that also with newer dips, will be consolidated into a single service instead of being split between Disney+, Hulu and ESPN.

Diving into the report, we learn that Disney+ itself – including domestic and international subscribers and users of Hotstar (which operates out of India and delivers Disney+ content to a number of Southeast Asian countries where the regular service isn’t working)—a total of 137.7 million subscribers. In the US and Canada, that number is only 44.4 million, still 30 million less than what Domestic Netflix sports. Which is mostly just a reminder that what investors really like isn’t raw numbers, it’s growth (and managed expectations); Despite the backlog, Disney has added subscribers over the last yearwhile Netflix lost something so this can easily be turned into a win for the mouse.

The company seems to be similar largely unconcerned that its digital offerings are operating not just at a loss, but at a loss increasingly a; Although revenue increased for the quarter, expenses increased even more, meaning Disney lost $0.9 billion on streaming over the trailing three months (up from $0.6 billion in the previous quarter).. As we have already said, the company has always been on the rise Front about how expensive it would be to get into streaming, but it’s a sobering reminder that not even Disney can make money off of nothing. Among other things, the company is said to be lost $1 billion in penalties for contracting with a client who licensed its content, presumably to give that material to Disney+ instead.

The upshot of all this is that winning in the streaming world is often about both looks and hard numbers; Disney can take such losses happily because, well, literally afford. Even so, the company appears to be pushing to get an ad-supported tier of streaming (which, at the same time, will boost subscriber numbers and Get some ad revenue up front, which you’ll soon be able to put together for the streaming service.

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