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Disney+ adds 7.9M subscribers in Q2 as revenues continue to rise

Walt Disney Co. added 7.9 million subscribers to its Disney+ streaming service in the second quarter to bring its total global subscriber base across all of its platforms to 205.6 ...
May 12, 2022

Walt Disney Co. added 7.9 million subscribers to its Disney+ streaming service in the second quarter to bring its total global subscriber base across all of its platforms to 205.6 million.

In a further sign that the streaming war is tightening, Disney’s subscriber growth comes in sharp contrast to Netflix, which just weeks ago surprised many in the industry when it reported a loss of 200,000 subscribers (for a global total of 221.6 million) and announced it would explore ad-supported pricing tiers.

“Our strong results in the second quarter, including… continued growth of our streaming services — with 7.9 million Disney+ subscribers added in the quarter and total subscriptions across all our DTC offerings exceeding 205 million — once again proved that we are in a league of our own,” said Disney CEO Bob Chapek (pictured left) in a statement to shareholders.

Disney’s total revenues rose to US$19.2 billion in the quarter, an increase of 23% from Q2 of last year but still short of Wall Street’s expectations by about $1 billion. Net income fell 48% from a year-earlier $912 million to $470 million, with diluted earnings per share of $1.08.

At Disney’s media and entertainment division, revenues rose 9% from the prior year to $13.6 billion as film and TV productions mostly resumed from pandemic-related shutdowns, though restrictions still remain in some markets.

Meanwhile, the conglomerate’s direct-to-consumer division, which includes streaming services Disney+, ESPN+ and Hulu, saw revenues rise 23% to $4.9 billion while operating losses increased $597 million to $887 million on higher losses at Disney+ and ESPN+ due largely to increased programming costs and lower operating income at Hulu.

Disney+ saw its total global paid subscribers (including Disney+ Hotstar) rise 33% to 137.7 million from 103.6 million in Q2 of 2021, while ESPN+ saw its subscriber base grow 62% year-over-year to 22.3 million from 13.8 million the previous year. Total Hulu subscribers rose to 45.6 million, an increase of 10% from 41.6 million a year earlier.

On a call with investors after the results were released, Disney CFO Christine McCarthy (pictured right) said the company enjoyed a “stronger than expected first half of the year” and doesn’t necessarily expect to maintain the strong momentum displayed in the Q2 results in upcoming quarters, adding that some of the territories Disney+ is set to expand to at the end of Q3, such as Eastern Europe, “are in regions being impacted by geopolitical factors” that could limit growth in the near term.

McCarthy added that Disney remains “confident” in its long-term guidance of 230 million to 260 million global Disney+ subscribers by fiscal 2024, which is also when the company expects the service to achieve profitability.

At the company’s linear networks division, revenues increased 5% to $7.1 billion while operating income slipped 1% to $2.8 billion.

Revenues at the domestic channels unit were up 8% to $5.8 billion as operating income rose 3% to $2.3 billion on higher operating income at the broadcasting division, partially offset by lower operating income at cable. Meanwhile, revenues at the international channels division were down 3% to $1.3 billion in Q2 as operating income decreased 30% to $245 million.

Content sales/licensing and other revenues fell 3% in Q2 to $1.9 billion as operating income slid to $16 million from $312 million a year earlier on lower TV/SVOD distribution results and a decrease at home entertainment due to lower sales of catalog titles.

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