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Disney reports higher Q4 revenues amid slowing Disney+ subscribers

The Walt Disney Company reported its fourth quarter earnings, recording revenues of US$18.53 billion, up 26% from the previous year, as the media giant saw its total paid subscribers for ...
November 11, 2021

The Walt Disney Company reported its fourth quarter earnings, recording revenues of US$18.53 billion, up 26% from the previous year, as the media giant saw its total paid subscribers for all of its streaming services hit 179 million.

Revenues at the company’s Media and Entertainment Distribution division rose 9% to more than $13 billion on higher ad revenue from the return of live sports, offsetting higher programming costs. Meanwhile film and TV distribution was hit by lost revenue from the delay or cancellation of major film releases, which was in turn partly offset by reduced amortization, marketing and distribution costs.

Direct-to-consumer revenues jumped 38% to $4.6 billion, as total paid subscribers rose 20% year-over-year. Disney+ subscriptions hit 118 million, an increase of 60% from the previous year but only a slight increase from the 116 million reported in Q3 of 2021.

Operating loss for the DTC division rose from $0.4 billion to $0.6 billion on higher losses at Disney+, due to higher programming and production, marketing and technology costs, while higher subscription revenue reflected subscriber growth and a recent price increase. The increased “Premier Access” revenue came on the release of two high-profile films, Black Widow and Jungle Cruise, compared to one in the prior-year quarter. The increases in costs and subscribers reflected the ongoing expansion of Disney+.

Meanwhile ESPN+ subscribers rose to 17.1 million from 10.3 million in the previous year, while total Hulu subscribers rose 20%, from 36.6 million in Q4 of 2020 to 43.8 million this quarter.

Revenues at Disney’s Linear Networks unit fell 4% to $6.7 billion, while operating incomes slipped 11% to $1.6 billion.

Domestic Channels revenues were down 5% to $5.4 billion, with operating income decreasing 14% to $1.4 billion on declines at its Broadcasting and Cable divisions. Revenues at the International Channels unit were down 3% to $1.3 billion as operating income rose 49% to $140 million on a decrease in programming and production costs and higher ad revenue.

Revenues for the Content Sales/Licensing and Other unit rose 9% in the fourth quarter to $2 billion and operating results fell from an income of $86 million to a loss of $65 million on lower theatrical and TV/SVOD distribution results.

Quarterly revenues at the Parks, Experiences and Products division rose to $5.5 billion, up from $2.7 billion in the prior year and operating results jumped $1.6 billion to an income of $640 million. Revenue and operating income growth came on the reopening of the company’s parks and resorts, which this year were open for the full quarter.

“We’ve made great strides in reopening our businesses while taking meaningful and innovative steps in Direct-to-Consumer and at our Parks,” said CEO Bob Chapek in a statement. “As we celebrate the two-year anniversary of Disney+, we’re extremely pleased with the success of our streaming business, with 179 million total subscriptions across our DTC portfolio at the end of fiscal 2021 and 60% subscriber growth year-over-year for Disney+. We continue to manage our DTC business for the long-term, and are confident that our high-quality entertainment and expansion into additional markets worldwide will enable us to further grow our streaming platforms globally.”

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