Disney streaming subscribers rise to 235 million; video OTT losses said to have ‘peaked’

Disney subscribers rise to 235 million; streaming losses said to have ‘peaked’

The company is projected to have between 300 million and 350 million streaming subscribers by the end of fiscal 2024.

The Walt Disney Company, in its Q4 2022 results, announced a surge in global subscribers. Adding nearly 57 million subscriptions this year, it now has more than 235 million subscribers. 

This quarter, Disney+ has added 12.1 million subscribers, reporting a rise in global subscribers to 164.2 million. Hulu added 1 million subscribers reaching 47.2 million subscribers and ESPN+ added 1.5 million reaching 24.3 million. 

The company is projected to have between 300 million and 350 million streaming subscribers by the end of fiscal 2024.

However, streaming losses continue to grow, nearly doubling year-over-year to $1.47 billion. CEO Bob Chapek suggests that the company’s streaming losses have peaked, and it will achieve profitability in fiscal 2024. 

“Our fourth quarter saw strong subscription growth with the addition of 14.6 million total subscriptions, including 12.1 million Disney+ subscribers. The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally, and we expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate,” he said.

Direct-to-Consumer revenue for the quarter increased 8% to $4.9 billion and operating losses increased by $800 million to $1.5 billion. The increase in operating loss was due to a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved results at ESPN+, the company said. 

Disney+ will be launching its ad-supported tier on December 8. During the company’s earnings call, Chapek said the streaming losses are at “a turning point”. He outlined a three-pronged plan for profitability - the higher prices and ad tier, “meaningful rationalisation” of marketing spend, and more efficient content spend. He said the company has locked up more than 100 advertisers for the launch window for the ad-supported tier of Disney+.

Meanwhile, Christine McCarthy, chief financial officer, has forecasted a revenue growth of less than 10% for the new fiscal year.

In the earnings call, she highlighted the impact of the absence of the IPL. “At Disney+ Hotstar, we are currently expecting that subscribers will decline in Q1 due to the absence of the IPL, but we do expect to see some stabilization in Q2.”