Disney draws wave of streaming subscribers as Netflix falters Business

Disney has revealed it has attracted a surge of new subscribers for its Disney+ streaming service after rival Netflix reported a drop in numbers.

The entertainment giant brought in 7.9 million new subscribers in the three months to March, beating Wall Street expectations of 5.3 million and rival Netflix, which had lost 200,000 customers in the same period.

Disney still has a long way to go to meet ambitious multi-year goals, but the growth is a relief for investors.

Netflix’s fall was the first in more than a decade, as the cost of living crisis pushes households to cut back on non-essential spending as the number of competitors continues to rise.

Shares of Netflix have more than halved since earnings and other media stocks were also hit. Disney was down 2.5% on Wednesday evening after hours trading.

Disney must gain at least 9.1 million new customers per quarter to meet its goal of adding 230 to 260 million Disney+ subscribers by September 2024.

Total subscriptions for Disney+, which launched in November 2019, reached 137.7 million, helped by new releases including Marvel’s Moon Knight series and the Pixar movie Turning Red.

Disney’s other streaming services, Hulu and ESPN+, posted total subscribers of 45.6 million and 22.3 million respectively.

Quarterly revenue climbed 23% to $19.2bn (£15.7bn), missing analysts’ estimates of $20bn. Profits were 10% lower at $1.1 billion.

Theme park activity continued to rebound after prolonged pandemic closures and attendance restrictions.

However, Disney expects a hit of $350 million in the current quarter as some theme parks in Asia are closed due to shutdowns.

The company remains in the crosshairs of Republican lawmakers and Florida Governor Ron DeSantis for its opposition to a new state law banning kindergarten through third grade sexual orientation and gender identity instruction.

Mr DeSantis last month signed a bill to dissolve Walt Disney World’s private government controls over his property in the state in retaliation.

In February, Chief Bob Chapek again warned of a tough first half, but predicted that streaming subscriber growth would accelerate in the second half, when new film and TV projects are ready and more new markets will be added.

Streaming video is a key growth area for Disney, which, like other media companies, is seeing a decline in traditional television viewership.

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This notice was published: 2022-05-11 22:23:33

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