Disney + added 7.9 million subscribers in the most recent quarter to a total of 138 million worldwide, the company announced Wednesday, helping it avoid the streaming downturn that has recently brought down Netflix’s share price.
Like most media companies, Disney’s shares plummeted following Netflix’s announcement last month that it had lost 200,000 subscribers in the first three months of the year and expects to lose another 2 million this quarter. After years of praising media companies for losing billions on streaming, investors are now pushing to find a way to profitability.
The release of films such as Pixar’s “Turning Red” helped Disney + attract subscribers in its first quarter, which ended on April 2. Disney shares were down nearly 3 percent in after-hours trading following the earnings announcement.
Disney’s findings are good news for chief executive Bob Chepek, who is facing a public relations crisis arising out of the company’s response to Florida school law, which, among other things, prohibits discussion in the classroom of sexual orientation and gender identity. (Disney is the largest private employer in the state.)
The company initially avoided speaking out against the bill in public but turned itself upside down after an internal revolt. Mr. Chapek then denounced the law, which angered conservatives, including the Florida government. Ron Descentis. Last month, Republican lawmakers in Florida repealed a 1967 law that allowed Walt Disney World to operate as its own quasi-government. In the wake of the uproar, Geoff Morrell, who joined Disney in January as its most senior government relations and communications executive, resigned last month.
Race to rule on streaming TV
Disney’s revenue rose 23 percent to $ 19.2 billion from a year earlier, but it fell short of analysts’ expectations. Disney said it was hit by the decision to withdraw some of its content from other distributors in favor of its own channels, meaning a $ 1 billion reduction in licensing revenue as part of a trade-off for its direct-to-growth. Customer business.
Disney reported earnings of $ 1.08 per share, missing analysts’ expectations of $ 1.17.
Disney’s theme park unit roared a year ago when the Covid-19 epidemic reduced personal attendance. Compared to the same period last year, revenue in the division doubled, driving new line-skipping system increased.
With streaming services looking for more subscribers, India is becoming an important market. Deep pocket media companies are preparing to bid for the rights to show cricket matches from the popular Indian Premier League. Disney currently owns the rights to stream matches on its Hotstar service, which it acquired in its 2019 megadale with 21st Century Fox. Losing those rights can be a blow. However, Mr. Chapek said Disney could reach its subscriber goals even if it does not retain those rights.
On the call following the announcement of earnings, Shri. Chapek said Disney would eventually become more aggressive in moving major live sports to the ESPN + streaming service. The cash generated by the lucrative portfolio of ESPN cable channels currently disables it, so the company is adopting a standard approach to sports streaming, Mr. Said Chapek.
Mr. Said Chapek.
Mr. Chapek also answered an analyst’s question about the shortage of new Disney movies that have opened up in the Chinese theater market, where the company has had an unequal record in recent years. Mr. Chapek said Disney films are doing well in China without the help of moviegoers, pointing to the success of “Doctor Strange in the Multiverse of Madness”.
Mr. Said Chapek.