Disney overtakes Netflix in total streaming subscribers, raises prices in the US for ad-free options
Walt Disney Co. said on Wednesday it was raising prices for U.S. streaming subscribers who want to watch Disney+ ad-free, as more viewers switch to what CEO Bob Chapek described as the “best streaming value”.
The price increases are tied to a new tiered service Disney will launch in December for US subscribers. The basic Disney+ service today costs $7.99 (around Rs 630) per month. From December, this basic service will run advertisements, so a subscriber who does not want advertisements will have to upgrade to a premium service which starts at $10.99 (about Rs 871) per month, an increase of 37.5% compared to current prices. An annual plan will cost $109.99 (about Rs. 8,600).
“We expect the ad level to be popular and we expect some people to want to stay ad-free,” Chief Financial Officer Christine McCarthy said on a conference call with analysts.
Netflix’s most popular streaming plan in the US is now $15.50 (around Rs. 1,200) per month, and its premium plan is $20 (around Rs. 1,500) per month. This follows several rate hikes to help pay for its original programming, which has become even more important since Disney pulled its classic programming and movies from Netflix after licensing agreements between the companies expired.
Disney said it added 14.4 million subscribers to its Disney+ streaming service during the April-June fiscal quarter. In total, subscribers to all Disney streaming services, which include Hulu, ESPN+ and Disney+ Hotstar, stood at around 221 million, putting the entertainment giant slightly ahead of Netflix in the streaming wars.
Netflix ended June with 220.7 million subscribers, after losing nearly a million subscribers in the last quarter.
Disney said paid subscriptions for Disney+ were up 31%, much of it outside the United States, compared to the same period last year. But revenue growth wasn’t as strong due to operating losses from “higher programming and production, technology and marketing costs.”
Disney’s growing streaming sales, combined with the resumption of theme park operations after pandemic-era closures, led the Burbank, Calif.-based entertainment giant to beat Wall Street expectations with results quarterly on Wednesday.
Disney recorded revenue of $21.5 billion (about Rs 1,70,440 crore) in the three months to July 2, up 26% from the same period last year.
Earnings per share amounted to $1.09 (about Rs.80) excluding certain items. Analysts polled by FactSet had expected adjusted earnings of 97 cents per share on revenue of $20.99 billion (about Rs 1,66,403 crore) for the quarter, according to FactSet Research.
Disney said sales of its parks, experiences and products segment reached $7.39 billion (approximately 58,585 crore), up 70% from $4.34 billion (approximately 34,089 crore). rupees) a year earlier.
The numbers represented an ongoing rollback of COVID-19 restrictions that temporarily closed all Disney parks in 2020, reduced capacity for much of 2021 and continued to affect some locations such as Shanghai Disneyland, which did not been open only three days in April-June term.