Netflix’s stock took a nosedive last month after the streamer added fewer subscribers than anticipated last quarter, but its biggest rival, Disney+, isn’t seeing the same kind of slowdown in subscribe growth.
Streaming service Disney+ added 11.8 million subscribers in its first fiscal quarter of the year, and now has 129.8 million global subscribers, Disney told investors today. That’s a significant bump from the 2 million subscribers it added one quarter ago.
For the first time since the streamer expanded internationally, Disney broke out the domestic subscriber numbers for Disney+, reporting 42.9 million subscribers in the U.S. and Canada.
Hulu, which operates only in the U.S., grew to 45.3 million subscribers, about 1.5 million more than the 43.8 million it reported last quarter. Most of those subscribers are only on-demand customers; about 4.3 million pay more for the Hulu and live TV option, up about 300,000 from a year ago.
ESPN+ had some hefty gains, adding 4.2 million subscribers in the fourth quarter. Year-over-year, the sports streaming service has grown its subscriber base by 76%.
Overall, Disney now has 196.4 million total subscriptions across its entire direct-to-consumer portfolio. The company’s projected 2024 subscriber count—between 230 million and 260 million—remains unchanged.
Content is king
Content proved to be a huge driver for Disney+, with CEO Bob Chapek pointing to the success of the recent Marvel film Eternals, as well as Disney+ original series Hawkeye and The Book of Boba Fett, during the company’s earnings call Wednesday afternoon. “Our success at Disney+ this quarter was not the result of any one item, but instead a combination of organic growth and powerful new content,” said Chapek.
And while that may be true, the animated film Encanto “became a phenomenon” within days of its arrival on Disney+, becoming the fastest title to cross 200 million hours viewed on the streamer, according to the CEO.
After a muted theatrical debut in November where families with children continued to express reluctance to return to theaters, Encanto arrived on Disney+ on Christmas Eve.
“Results are exactly what you’d expect from the launch of a new Disney franchise, and we are thrilled that Disney+ was the catalyst,” said Chapek of Encanto. “We are more confident than ever in this platform as a content service, a franchise engine and as a venue for the next generation of Disney storytelling.”
Moving forward, expect to see Disney+ further prioritize general entertainment content, with Chapek saying six of the 10 most watched programs across Disney’s streaming services are general entertainment titles produced by its own teams.
“It’s often lost that the depth, breadth and quality of our general entertainment content is also a driving force behind the success of our streaming services,” said Chapek. “Going forward, integrating more owned general entertainment into our services, especially Disney+, will be a priority.”
Today, Disney+ added previous seasons of ABC series Black-ish and Freeform spinoff Grown-ish to the service, as well as episodes of ABC’s The Wonder Years. Those shows had previously been exclusive to Hulu.
“I think that’ll be a trend of us taking more general entertainment and moving it over to Disney+,” said Chapek, pointing out that about 50% of Disney+’s consumer base doesn’t have kids. “What we’ve seen time and time again is the elasticity of Disney and its brand is much greater than we might have given it credit.”
More big titles on the way
The content machine is gearing up to kick into full gear in the second half of the year, at which point many of the titles and projects first unveiled at the Disney investor presentation a year ago will finally begin arriving on the service. Marvel’s next Disney+ series, Moon Knight, premieres on March 30.
Following the success of the latest Star Wars series, The Book of Boba Fett, the company announced a premiere date for that brand’s highly-anticipated next Disney+ original series, Obi-Wan Kenobi, which will arrive on May 25. Disney+ hasn’t yet set release dates for upcoming Marvel series Miss Marvel and She-Hulk, the Pinocchio movie starring Tom Hanks and Hocus Pocus 2.
Across all direct-to-consumer, Disney expects to increase programming and production expenses from $800 million to $1 billion, including programming fees for Hulu Live.
Disney will continue to expand its investment in sports simulcasts, announcing that ESPN will expand its agreement with Peyton Manning and his Omaha Productions company, the team that launched Monday Night with Peyton and Eli this past NFL season. The extension adds a fourth year (through the 2024 season) to the flagship show, but also adds on a host of alternative presentations (with other hosts) for UFC, college football and golf to be produced by Omaha Productions in collaboration with ESPN.