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Disney+ is launching an ad-supported plan in December while its premium ad-free plan gets a steep price hike.
It’s official. Disney streaming services Disney+, Hulu and ESPN+ have together surpassed Netflix in terms of total global subscribers.
In its most recent earnings report published yesterday (10 August), Disney said that its flagship streaming platform Disney+ added 14.4m new subscribers in the company’s third fiscal quarter. This exceeds the expected 10m figure and brings its total subscriptions to more than 152m.
The subscriber boost has also meant that the total number of people now paying for Disney’s three direct-to-consumer streaming services now stands at 221m. This narrowly beats out Netflix, which had just over 220m subscribers in its most recent quarter.
Disney streaming service revenues for the quarter also jumped 19pc to $5.1bn. However, an increase in content and production costs led to a widening in operating loss from $0.8bn to $1.1bn in the latest quarter.
“We continue to transform entertainment as we near our second century, with compelling new storytelling across our many platforms and unique immersive physical experiences that exceed guest expectations, all of which are reflected in our strong operating results this quarter,” said Disney CEO Bob Chapek.
Disney+ to get Christmas price hike
The growing popularity of Disney+ comes at a time when Netflix is struggling to hold on to paid subscribers.
Last month, it reported a record loss of nearly 1m subscribers in the second quarter of the year and shared details of its planned subscription changes, including a lower-cost ad-supported tier planned for launch in early 2023.
Disney is also planning to launch its own ad-supported service later this year. Starting 8 December, Disney+ will be available in the US at a cost of $7.99 per month for the ad-supported plan – which is how much it charges now for a standard subscription.
Meanwhile, the ad-free service is set to become more expensive, pinching US subscriber pockets at $10.99 per month.
Mike Proulx, VP and research director at market research company Forrester, said that Disney+ is currently “winning the streaming wars” against Netflix “due to a strong content slate based on its IP that has universal mass appeal”.
“There’s no more denying that competitive choice is causing Netflix headwinds while Disney+ rides the tailwinds. This tells us that consumers who are even more price conscious right now are having to make tough choices on where to invest their streaming budgets based on the value they’re getting in return.”
However, he warned that Disney’s decision to sharply increase subscription costs in December may halt its momentum. “This is a questionable marketing choice during a time when consumers are feeling an extra financial pinch that might only get worse come 2023.”
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