Disney+ global subscribers climbed by 12.1million in the fourth quarter to reach 164.2million as The Walt Disney Company’s total streaming membership beat forecasts to reach 235.7million.
Overall Disney missed analysts’ projections as it reported total revenue of $20.15bn in the quarter for a 9% gain on Q4 2021, below Wall Street expectations of $21.44bn. Diluted earnings per share fell 19% to $0.30 versus expectations of $0.56.
Disney shares fell 9% in after-hours trading as Wall Street digested the twin headlines of subscriber growth and financial challenges, an issue that came to the fore at Netflix this year and has forced top brass at that company to pivot towards a greater focus on the bottom line.
The Walt Disney Company CEO Bob Chapek said he expected Disney+ to become profitable in fiscal 2024 “assuming we do not see a meaningful shift in the economic climate”. Disney+ launched three years ago and will debut its ad tier in the US next month and bring in previously announced subscription price hikes.
Direct-to-consumer revenues for the quarter grew by 8% year-on-year to reach $4.9bn, although operating loss climbed $864m to $1.5bn. A drop-off in Hulu results was partly responsible for this, and Disney executives also cited higher costs at Disney+, which was impacted by the expense of more original content and lost potential revenue due to the absence of Premier Access releases during the Q4 period ending October 31.
Revenue at Disney’s media and entertainment distribution division hit $12.73bn after a 3% drop against the same period last year, however the superstar was the amusement parks division, which continued to show post-Covid recovery, climbing 36% against last year to reach $7.43bn in its most successful year with revenies of $28.7bn for fiscal 2022.
Core global Disney+ subscriptions excluding Disney+ Hotstar added 9.3million to reach 102.9million and climbed 38% year-on-year. The key driver was international, where membership added 7.3million since Q3 for 56.5million and leaped 57% over the year-ago period. North American Disney+ subscriptions stand at 46.4million, up 2.1 million since Q3 and up 20% year-on-year.
Hulu added 1million subs since Q3 to reach 47.2 million, marking an 8% rise on the same period a year ago, and ESPN+ added 1.5million for 24.3million and climbed 42% year-on-year. While Disney’s total global direct-to-consumer subscriber base exceeds that of Netflix – which reported 223.09million last month – representatives at the latter company have pointed out there is no simple apples-to-apples comparison given that the companies calculate these metrics differently.
Looking at the year overall, Chapek highlighted the $760m worldwide gross of Thor: Love And Thunder since the July release and reiterated that Disney+ release Hocus Pocus 2 became the most watched premiere on the platform and produced 2.7 billion minutes viewed in the first weekend. Prey was Hulu’s biggest premiere ever across all films and TV series and was the most watched piece of content on Star+ in LatAm and Disney+ under the Star label in other territories.
Chapek emphasised a number of imminent theatrical releases for the remainder of the year, led by Black Panther: Wakanda Forever on Friday (November 4), Walt Disney Animation’s Strange World on November 3, Avatar: The Way Of Water on December 16, as well as the ongoing release of Searchlight Pictures’ The Banshees Of Inisherin, and upcoming launches for stablemates The Menu (November 18), and Empire Of Light (December 9).
Highlights in 2023 include Ant-Man and The Wasp: Quantumania (February 17) Guardians Of The Galaxy: Vol. 3 (May 5), The Marvels, (July 28), Disney’s live-action version of The Little Mermaid (May 26), Pixar’s Elemental (June 16), and Indiana Jones 5 (June 30) – all of which, Chapek took care to remind analysts on the earnings call, will eventually make their way on to Disney+.
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