The Walt Disney Company’s over-the-top (OTT) services surpassed that of Netflix, the company’s earnings announcement showed on Wednesday, local time.
In the third quarter of fiscal year 2022, Disney Plus saw its number of subscribers increase by 14.4 million to reach 152.1 million in total. The figure is far over the market consensus of 147.7 million.
Here, adding up the two other Disney video streaming services, ESPN Plus and Hulu, the American entertainment giant has 221.1 million subscribers. Netflix recently revealed that it has 220 million membership users. It took five years for Disney to beat Netflix in its number of streaming subscribers, since the launch of the latter’s OTT services in 2017.
Nonetheless, Disney has lowered its goal for its number of membership users for fiscal year 2024. At the end of 2020, it originally predicted it would have 230 million to 260 million subscribers in four years. However, the company now forecasts a total of 215 million to 245 million subscribers over that period. The reduction is due to the expiration of India’s cricket broadcasting rights for Disney Plus Hotstar, which mainly targets the South and Southeast Asian regions. Disney expects its streaming subscribers to decrease as a result.
Disney also has the challenge of improving its profitability with its streaming business.
Although its number of OTT service membership users has increased, it has been recording consecutive operating losses for a while. In the most recent quarter, Disney logged $1.1 billion (1.43 trillion won) in net losses. As many customers in the United States and Canada choose to use cheaper services than those offered by Disney Plus, the average profit per streaming subscriber decreased by 5 percent last quarter.
Here, Disney said it will increase the streaming price from December. It will charge $7.99 for video streaming with advertisements per month and $10.99 without advertisements. The bundle consisting of Disney Plus and Hulu, both with advertisements, will cost $9.99 per month.
“I don’t think the price change will lead to meaningful losses in terms of streaming subscribers. I think it is well worth raising the price,” Walt Disney Company CEO Bob Chapek said.