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Disney+ subscribers now total 118 million, linear TV business dips

Forewarning some softness in its highly scrutinized streaming business, Walt Disney said it added 2.1 million Disney+ global subscribers in its fiscal fourth quarter — now totaling 118.1 million.

Disney stock was down 4% after the market closed on Wednesday.

Weeks ago, at an investor conference, Disney CEO Bob Chapek had warned that the business was enduring some “headwinds.” Disney+ would be adding just “low single digit” million subscribers in its quarterly period.

Even with Chapek’s messaging, analysts were projecting Disney+ would have a total of 125.4 million in the period. Still, Chapek believes Disney+ can reach 230 million to 260 million subscribers by 2024 by expanding into new territories.

Company-wide, Disney revenue grew 26% to $18.5 billion, with the company reversing a net loss ($710 million) into a net income of $160 million in the period. An expected rise in results this year was compared to the pandemic-era period of a year ago.

Disney’s linear TV network business slipped 4% to $6.7 billion.

The U.S. linear TV business had lower ad revenue at its ABC-owned TV stations due to comparisons to the year-ago period, which had high political advertising, during the presidential election season.

Disney’s cable networks took on lower affiliate revenue, due to fewer subscribers as well as lower advertising revenue — the latter attributed to one extra week in the period a year ago. In addition, at ESPN, some college football games were shifted out of the fourth-quarter period.

In more positive news, the ABC Television Network’s advertising revenue was comparable to the year-ago period, with higher affiliate revenue.

The company’s direct-to-consumer business continues to see sharply rising results — 38% to $4.6 billion. At the same time, operating losses rose near 70% to $630 million.

Year-over-year, Disney+ was up 60% to 118.1 million subscribers, while ESPN+ added 66% to 17.1 million and Hulu (SVOD) grew 22% to 39.7 million.

One major element to attract new global subscribers going forward will be the 340 new local-focused original programs for the global market now in the works, per Chapek.

Average monthly revenue per subscriber for Disney+ came in at $4.12, down 9% year-over-year — mostly due to lower results from Disney+ Hotstar operations in India and Indonesia.

Content sales and licensing revenues were up 9% to $2 billion.

Although theatrical content has been ramping up slowly, there are still pandemic-related disruptions that might affect other windows for movie revenue in coming periods.

“Fewer theatrical releases and production delays have limited the availability of film content to be sold in distribution windows subsequent to the theatrical release,” the company said.

Mike Proulx, vice president-research director at Forrester, told Television News Daily: “Disney is betting on a streaming future and that success will be based on consumer reception of a surge in originals … Ultimately consumers are loyal to great content, not necessarily the streaming service itself.”

Proulx adds that young-skewing Disney consumers are showing gains.

In the U.S., Forrester sees 12- to-17-year-olds using Disney streaming services at least once a month at 45%, up from 38% a year ago. Young-skewing consumers are also growing at Hulu. MediaPost

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