Disney triumphs over streaming narrative and keeps adding subscribers

Future. Disney’s latest quarterly results show that the Mouse House’s streaming train can’t be stopped, adding millions of new subscribers. But these days, growth at all costs isn’t cutting it anymore, so it’s working hard to make Disney+ a profitable service… demonstrating that even though the old pay TV model may have fallen out of favor with audiences, it may still be the better business move.

Keys to the kingdom
THR reports that Disney is still capturing some magic with streaming, beating Wall Street expectations (hard to do these days) by adding a total of 9.2 million subscribers across its three main services.

• Disney+ led the way by adding 7.9 million subscribers (Wall Street expected 4.5 to 5 million).
• ESPN+ added 1 million subscribers.
• Hulu added 300,000 subscribers (Hulu is only in the U.S., so growth is limited).

Unsurprisingly, Disney+ is the priority for the Mouse House, which now counts 137.7 million total subscribers, putting it on track to post Netflix numbers in the coming years (still the leader with 222 million subscribers).

Profit power
But subscriber growth is not the only thing on Disney’s mind. With Wall Street now skittish about whether streaming is actually good business, the company wants that old-school thing called “turning a profit” (which it plans to do by 2024).

• CEO Bob Chapek said that its coming wave of top-shelf content would give Disney+ the runway to raise prices without angering consumers — especially with Netflix making more than twice per subscriber (ARPU) than Disney+ in the U.S.
• It’s cutting its annual content spend from $33 billion to $32 billion (a drop in the bucket, but the exact amount that the studio lost from taking back licensed shows from other streamers).
• And it has an ad-supported tier rolling out soon, which should drive both subscriber growth and bring in significant ad revenue.

While Disney reported that streaming revenue increased 23% to $4.9 billion, linear network TV brought in a hefty $7.1 billion — only a 5% increase, but still, as Chapek noted, a “huge cash generator.”